Credit cards - The fine print in your bill can hurt you

Be aware when you use your bank card, or your penalties and interest rate could climb significantly. The credit card industry is a profitable one, and you can quickly add to their profits by neglecting to read the fine print that comes with your bill every month.

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Bank cards are generally safer than using cash, they offer a simple way to buy things on the World Wide Web, and they allow shoppers to buy things for which they do not immediately have cash available. In today's economical climate, keeping at least one major bank card is essential; you can not, for instance, rent a car without one. The typical American household carries nineteen different credit and debit cards.

The major credit card issuers are quick to point out their reasonable terms. Many charge card companies provide such amenities as a "permanent" low interest rate, or a "cost free" transfer of balances from other credit card accounts, or how easy it is to take out a cash loan, or the "0%" teaser rate of interest offered to new customers.
 

What the bank card issuers do not often mention is the diverse charges that could end up on your bill if you do not look over the terms in detail. If you are not careful, a charge card can be a particularly pricey financing tool.

Below are a few things you may not know about that may be useful:

• If your billing statement says that the payment is due at 11 AM, Eastern time, then it is late if it arrives after that time, even if it shows up later that day. Late fees or penalties apply if your bill arrives late, even if your payment comes in on the day the payment is due. Paying late means even one minute after the precise time of day the bills are stated to be due. Late penalties add up, and are many times as much as $39.
• Your are allowed to use your credit card to get cash from an ATM, but a fee will apply, as will a rate that will be considerably higher than for regular charges. There is no grace period for cash advances. Rates on cash advances accrues beginning the minute you take the money out of the Automatic teller machine.
• While banks like to promote their balance transfer capability, don't make the assumption that moving the five thousand dollar balance over from one of your other accounts will be free. If a balance transfer is treated as a cash advance, you won't have a grace period. Be careful when moving balances to another account; it could cost you hundreds. There may be a fee for a balance transfer, and it may be treated as a cash advance, which carries higher fees and interest rates than for purchases.
• There is no such thing as a "permanent" rate of interest, regardless of what your bank issuer may claim. If they want to keep your rate low for a long time, be grateful. A "permanent" interest rate is permanent only until the bank decides that they want to raise your rate, at which point "permanent" becomes short term. The cardmember agreement on your bill typically states that the issuer may raise your rate at any time, for any reason, as long as they give you fifteen days notice.

These are just a few of the items one has to watch out for when using your plastic. Be careful when using your charge accounts; it could cost you a lot more money than you bargained for.