June 2, 2005

Credit cards may seem as if they are giving you the deal of a lifetime nowadays, with the 0% deals on balance transfers for a full year and some also giving you the same deal for purchases as well, it may all seem to good to be true and you would be right.

Credit card issuers are never going to do anything that is for our benefit in the long run and with a careful study of the fine print, you will find that they have a James Bond type licence, not to kill but to make a killing.

We all feel as if we need a credit card these days, as they are handy (maybe to handy, in the hands of my better half) and are needed in day-to-day life now, but they are not getting any cheaper to own and live with.

Related Articles

Credit Card : Hidden Extras In The Small Print
Credit Cards – Just What Are They?
Compare

This is where the credit card companies offer us the fantastic offers on face value, but have these deals totally set up to work in they’re favour and not ours and is weighted against us at all times, a bit like robbing the poor to make themselves richer.

So if you want to avoid the tricks and little deviances that the credit card issuers apply to the small print, then there are a few tings that you should look out for.

• LATE PAYMENTS: Credit card companies will make regular checks on accounts, which can then be charged a fee of £15-£25, but they can in some cases cause the card issuer to see you as a risk, in which they may bump up your interest rate.
• BAIT: Some may have a card advertised at a special rate, which you then apply for, but written in the small print is if you are not eligible for this card, then a card with a higher rate of interest may be sent out instead and you don’t receive the deal you applied for in the first place and you wont even know.
• GRACE PERIODS: This is where you have a period of time to pay off any transactions that you have made before they start to accrue any interest, these could have been as much as 56 days from the purchase, but have recently started to dwindle, with some cards not even giving any grace period at all.
• BILLING: Most credit card issuers will calculate your bill over a one-month period. But there are some who use a use the average of the two previous months, so if you have paid off the current bill in full, you may find that interest could have been added for the bill that was not paid off the month before.
• USAGE CHARGES: Or lack of use, can inflict a little pain on your finances, if you don’t use our card, credit card issuers are in it fro the money we all know that, so if you fail to use your card in lets say a period of 6 months, you could then be liable to a fee of £10 or more.
• OVER YOUR LIMIT: You will find yourself with another charge if you step over your credit limit, this could be as much as £35, though some credit card issuers wont charge if it is not a regular occurrence.
• PAYMENT ALLOCATION: This is where the credit card lender will take your payment and apply it to the debt that will mean it makes more from your money. For example if you have made purchase at a promotional rate of 0% and you are carrying a balance when the offer ends and you make a few more purchases, then the cash that you pay into your account will then go to pay of the money owed on the promotional rate, with interest now being added to your more recent purchases, that will now incorporate the higher interest charges.
• BALANCE TRANSFER FEES: Are now being introduced by more of our credit card issuers, mainly because through they’re own doing they created a monster called a “Rate Tart”, where people were jumping from one card to the next, to save paying interest, now the lenders didn’t like this so to combat it they have now introduced a fee on the balance that is being transferred, to try and make customers stick to the one credit card company. These fees will be a percentage of the balance transferred, with some credit card companies putting a cap on the fee at £50.

These are a few of the things to look out for when applying for a credit card and hopefully you will look beyond the headline offers that the credit card companies hope will turn our heads in they’re direction