Credit cards - The fine print in your bill can hurt you, part 2

The usefulness of credit cards doesn't mean that you should agree to be taken to the cleaners by the details in your bill. If you fail to read your credit card statement in detail, you will be paying a fortune in additional charges. Credit cards are necessary for conducting business in the modern world of Web commerce.

Continued below

Bank cards allow people to shop at EBay all you like from the comfort of your own home. Bank cards let you purchase today and pay later if you won't have the money until this summer. Bank cards are useful tools; you can buy something today when you won't have the money until next Monday. Charge cards are extremely profitable for the businesses that issue them, and a big part of the profit comes from the hidden charges that are mentioned in the billing statement, but seldom read by the people who use them.

Here are a number of things that unwitting customers might find in the details of their billing statements if they would just bother to read them.
Zero percent interest rate - Cardholders should read the statement about unusually low interest offers, due to the fact that a single payment made late might raise your interest rate a lot. Take caution not to pay late when taking advantage of a low interest teaser offer, since late payments could trigger huge increases in the rate of interest. Card-issuing banks will frequently offer an introductory rate of 0%. Promotional rates generally apply for a declared amount of time, such as six months.

The Universal Default Clause - If you pay late on any bill, your creditor will use this as an excuse for raising your rate of interest. Your creditor will evaluate your credit report every now and again to find out if you have made a late payment to anyone. The justification for the Universal Default Clause don't actually make sense, but then again, the credit card company doesn't need a reason to increase your rate, since they can and will increase it for any reason at all. The Universal Default Clause is a relatively new penalty, and many companies are adopting it. The explanation offered for the Default clause is that paying late makes you a risk to pay others late.

Minimum payments - Your best bet to avoid being hurt by mandatory payments and accruing interest is to try not to keep a balance. The required payment of two percent in the past was a good, low, reasonable amount, but by coughing up so little you might be repaying your outstanding balance off permanently, which is just what your card-issuing bank would like. Formerly, the minimum payment was typically just two percent of the outstanding balance. Currently, mandatory payments are typically about 4%, but remitting more is ideal. Nearly all companies have now raised their required payment levels to those suggested by the Federal government several years ago. Check your limit. Surpassing your limit will trigger a penalty and an increased interest rate, which could mean 30% or more indefinitely. Just like your creditor can raise your interest rate, they may also alter your credit limit. The last thing you want is to move a large charge card balance to one account from another credit card, only to realize that you have exceeded a credit limit that is lower than you thought.