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The Issue of Hidden Credit Card Costs and You

Mon, 03/09/2009 - 03:54 — Mydrive
It cannot be denied that credit cards are a part of life. We use it in buying groceries, clothing, paying utilities, purchasing airline tickets, making hotel reservations, etc. But many consumers who own credit cards fall in the trap of bad debt. Why?

According to the Government Accountability Office (GAO), a lot of credit card holders do not realize that occasional misses or delays with their credit card payments can cost them extra bucks on interest rate and penalty charges.

In a study conducted by the GAO, it has been found that leading credit cards in the market use confusing terminologies in their Terms and Conditions. Included in this study are Citibank, Discover, Chase Bank USA, Bank of America, MBNA America, and Capital One Bank.

Misleading Credit Card Conditions

Credit card companies are required by the law to disclose all fees in their credit card agreement. However, some statements may be vague or misleading. Add to this, the Terms & Conditions are often written in very fine print making them difficult to read. But if you won’t spend time reviewing your contract, you could end up with a card that imposes unreasonable rates.

If some terminologies or phrases are unclear, don’t hesitate to call the credit card company and ask for a detailed explanation. As a consumer, it is your right to understand everything associated with your credit card.

Using a Credit Card to Your Advantage

Aside from misleading conditions, it has been found that many credit card issuers today impose unreasonable rates and fees. If you take a look at credit cards in the market, most use the variable rate system of calculation. As a result, many cardholders have found themselves stuck in bad credit and the number is expected to increase in the coming years.

As a consumer, it is your duty to research for a credit card that would serve you best. Don’t just rely on what the ads tell you. Use your senses. Research. Investigate. Inquire. Compare. Only by doing these steps can you find a credit card with reasonable terms.

Finally, upon finding the right credit card, keep your lifestyle simple and think ten times before you using your credit card. Owning a credit card should be taken as a serious responsibility. Failing to keep up with your responsibilities as a credit card holder could lead to debt and financial trouble.

About the Author

Melanie Mathis is a credit analyst and an assistant writer of Liz Roberts for 8 years. She has been participating in the programs of NHBS, Inc such as their continuous effort in giving out Free Credit Repair and Building Ebook. NHBS also has a list of recommended bad credit cards. Copyright 2009.

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Comments

Thu, 05/07/2009 - 06:45 — VicGamboa

Are there any hidden fees

Are there any hidden fees with debit cards like there are with credit cards ; example : credit cards cost 16% per each purchase you make - what about debit cards? Don't you just pay a certain amount - and if a service says they take debit cards like say net zero how do I send it to them?
Mon, 05/18/2009 - 23:47 — C.Angel

hidden fees

nope there generally are not any hidden fees associated with debit cards. Some of them do charge a loading fee, but not all. You just have to read the fine print before you sign up for it. I recently nearly purchased a debit card at a local store for my nephew. I read the fine print and found they charged a monthly fee and a loading fee! I went online and got him the wired prepaid card instead
Tue, 07/21/2009 - 08:41 — attiq

Thanks for the post.

I think you say absolutely right that the credit card now become an important part of our life. We use it on the daily basis and people are not aware of the hidden cost after the payment late. This post create awareness for lots of people to control this cost for different prospective.
Tue, 08/18/2009 - 14:22 — Jude

According to the Government

According to the Government Accountability Office (GAO), a lot of credit card holders do not realize that occasional misses or delays with their credit card payments can cost them extra bucks on interest rate and penalty charges.
Fri, 08/21/2009 - 18:50 — dummply

Financial Times mulls

'm not gonna pay to read news.....I'll either find it somewhere free or just not bother. The bbc will stay free right? It's getting it's money from our license fee's so we're already paying for it effectively.

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