Credit cards have definitely made our lives easy. Anything that is eye catching soon becomes your property thanks to the tiny little card in your wallet. You want to buy grocery, you buy it on credit. You see a swell watch while you are out window shopping, you quickly swipe your credit card and there it is – a brand new watch on your wrist! There is a party tonight and you absolutely have to wear that expensive nice red dress you saw by the showcase. You immediately go, give them your card and the dress is yours for good. It is almost like magic until of course you are snapped out of the spell by your credit card bill at the end of the month.
A good percentage of Americans are struck by the ‘credit card flu’. Irresponsible use of the credit card would definitely lead to a lot of debt, stress, debt consolidation, high rate of interests, payment defaults and then finally bankruptcy. The average American has so much debt on his credit card that politicians and economists are citing this as a sure sign of an imminent economic disintegration.
Can you avoid huge bills on your credit cards?
When you get a credit card, you not just get the card but also lengthy fine prints which you may not have the patience to go through. But make sure you read them because there might be small catches that you will miss otherwise. You can manage your credit card far better by keeping your eyes open for credit card catches like:
• Annual fees: Your credit card company may charge a certain amount as annual fee but that should be between the range of $35 and $50. If you want to see the exact amount your credit card company is charging you then check out the ‘Schumer Box’.
• Grace Period: Usually there is a grace period of 20 to 30 days in a standard credit card for paying your bills beyond the due date and without being charged any extra. If you are a credit card user who pays your bill in full each month, then you may have the privilege to enjoy long grace periods. However, remember that if your card doesn’t have a grace period then an interest is charged on your card as soon as you make a purchase.
• Fees for bill payment: Some credit card companies might charge an extra amount for online bill payment facility or for payment over phone. So, if you want to avoid paying those extra dollars, then pay your bill through mail as soon as your statement arrives.
• Introductory offers: Many credit cards have an introductory rate for the first few months. Many have a 0% offer but make sure you know everything that is associated with your card and the offers that it includes. Be aware of the time till when your offer is valid and clarify any doubts you might have with your credit card company.
• Penalty: Most of the credit card companies have a penalty rate clause wherein you have to pay a penalty for late payments. Your rates might also increase on account of late payment. However, if you continue to pay your bills on time for about six months, your credit card company might consider lowering your late payment rate.
• Universal default: This is a clause that allows creditors to raise your interest rates if you make a late payment on any account. Your creditors check your credit report and keep a track of the payments that you make. However, you can have a good credit report by paying all your bills on time.
Credit cards are by far the easiest way you could borrow money. This is probably why people are not wary of the debts they might incur with improper use of the cards. Credit card debt management is an art that everyone must learn. Unless you can learn how to manage your debts you can never have a good credit history and hence a good credit report.
Jason Holmes is a reputed author and he has been writing articles on debt consolidation. He has also written for the Debt Consolidation Care community. Some of the articles written by him include Debt free, Credit card debt management, Bill consolidation, Ameriloan and Legacy Visa. His write ups are very informative and have proved to be very helpful those in debt.