March 17, 2009
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Guidelines to the CC Fine Print, Pt.1
Promos, Fine Print and ‘Gotcha's.Both credit card ‘promos' are enticing. We must keep in mind, however, that they are cleverly designed for the credit card lender to make a profit from the consumer, not the other way around. Certain ‘surprises' are built in to provide for this, usually in the form of high interest but can also show up in the form of hefty penalties and fees. This warning is not to steer you away but to remind us all that some vigilance may be required. The answers are almost always found in the fine print of the credit card contract that we must endorse when opening the account. This is an extension of the primer entitled: "Tending to the Credit Card Fine Print". For a fuller outlook, please refer back to this article.
Promos: Low interest and even 0% interest credit card promos have become commonplace today. This can be a very good thing.
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Benefits: Think about it...the cash that can be deferred for 12 months can be applied to other costly drains like other high interest credit cards you may have.
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Risk: The one main risk to be vigilant of here is the ‘expiration'. You should know from the beginning that this will happen and should be well prepared for it.
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Interest hike: The fine print can be tricky, here. When the fine print says "...until the first billing cycle in April", this doesn't mean the statement in May. It means the first statement that contains any charges from April. Many credit card lenders like to set up these cycles to include one or two days of the new month at the cycle end. So if your statement comprises all April charges, it could be that the statement actually didn't end ‘till May 1. You may not notice this if you made no charges on May 1 so nothing from May showed up on the statement. The safest route is to either pay your balance off a month early or else call Customer Service and get a clear determination of "When is the last safe day to pay the balance off?" If you plan to keep a running balance, make sure you know what the finance charge will be. You can go backwards quickly with high interest.
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Default: What ever you do, never be late on a credit card payment and never go over your limit. Penalties are most harsh and unforgiving. Always pay early just to be sure and stay well below your limit.
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