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There's more to credit costs than interest rateAug 31 '00 Write an essay on this topic.Credit card companies send wonderful offers of low interest, no-fee cards all the time. They desperately want to get their hooks in you. If you are inclined to accept these offers, read them carefully. Low introductory interest rate offers are usually for a very short time, many just long enough for you to get the card in the mail and maybe a month or two to run up the balance, then, wham!, the interest can go to 16% or 21%. Some bargain! Read all changes in credit card agreements. Credit card companies are devising new ways to extract money from you every day. Huge late fees are one trick. Late on a payment for any reason such as check lost in mail or credit card company slip-up. Sam’s Club Credit Card (Monogram Credit Card Bank of Georgia) charged me a late fee in August. I used a bill pay service who showed that the payment was mailed on August 3. Sam’s Club Credit Card said that they received the payment on 8/21 and credited my account on 8/23. I can’t prove who messed up, USPS, bill pay service, or Sam’s, so my bill pay service is out $25 for a late fee. Monogram Credit Card Bank no longer provides me with credit. Capital One charged my wife a late fee even though the check cleared her bank on the due date. Obviously they had received the check before the due date. Capital One no longer provides her with credit. Providian Bank sent out an amendment to the credit card agreement allowing them to charge a $29 late fee. I called them and told them that I didn’t want to send my payments registered mail and I wouldn’t risk $29 on the USPS or Providian’s mail room skills. Providian no longer provides credit services to me. Another trick is to place a clause in the agreement that if you ever miss a payment they can raise your interest rate from, say, 10% to 21%. The trap is set waiting for you to forget a payment, write the wrong amount, or for the Post Office or the Credit Card Company to lose your check. Close these accounts, it is only a matter of time before they get you. Some people have recommended having only one credit card so that it is easier to keep up with the account. I say you should have an extra one standing-by to transfer a balance. American Express (Optima) was always willing to lower an interest rate to match competitor to keep my business. I don’t have a standard answer for the late fee problem; almost all the companies have one now. I do recommend that you burn up $100 worth of their time with complaints and close the account when you get an unfair one. Don’t use a credit card with a interest rate escalation clause in the agreement. If you or they make a mistake or if you get into credit difficulties, problems are compounded. Complain! Complain! Complain! If a credit card company loses one customer, they don’t care. If they lose a million they certainly do care and will adjust their policies. Shop for the best deal on a credit card and be sure to compare the “hidden” charges.  |
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