What if Credit Card Deals Mislead You?

November 09, 2007

Nowadays we can see so many attractive credit card offers such as balance transfers, low APR, no Annual Fee, etc. But doesn't it seem to you that the secret of their popularity is not so much in profitability for the customers, as in profitability for the issuers. Unfortunately, we can't understand it so deeply in theory as much as if we came through all the complications connected with that. We used to admit that everything in this life has to be paid but then again we want to convince ourselves that these excellent credit card offers are REALLY excellent and these attractive promises are true. Indeed, being short of adequate knowledge about usage of credit cards customers make various mistakes, sometimes very serious ones, and admitting these mistakes after all is probably the most upsetting fact.

For example, according to some research about two thirds of clients ignore the advantages and use inefficiently balance transfer credit cards with introductory percentage rates available. When dealing with a credit card you should be extremely careful. Sad but true, too many people forget about it and, through making quite dangerous errors practically every day, get trapped. Here are the most widespread mistakes.

First, sometimes it is quite tempting to put off your bill and pay it off as soon as you have time. Actually, the time passes, and then you realize that it's just the deadline to pay. Here occurs another mistake: this deadline is not for a consumer to pay, it's for an issuer to get the money. This mistake is turns out to be really troublesome when you are charged a penalty, moreover, this fact is recorded in your credit history, getting available to everyone who will be later interested and affecting your credit score in any way. Just one of the results is getting bad credit and the necessity to rebuild it.

Another mistake is collecting credit cards. If someone opens a wallet it may seem like he or she keeps about fifty credit cards just for 'keeping' them. Please, note that using one long-term account is a good feature for your credit score. You get more and more credit cards and your credit score gets lower and lower. Moreover, just realize if you have to pay an annual fee for every credit card you own! Quite costly, isn't it?

Extremely often consumers are caught up in various rewards which seem to be so attractive. Ask yourself, why would someone give you money? Or, in the long run, why do you have to become another victim of these - quite smart, we should recognize - stunts? Remember, basically a reward credit card is a high-interest card.

Finally, READ the credit card agreement! And don't sign anything if you haven't read all of the terms and conditions. Pay more attention to any future changes in rates and all of the fees you are charged (plus those you CAN be charged). Be sure that you are well-informed about the credit card you want to apply. In this case you'll avoid some unexpected and unpleasant situations.