Newsweek has 10 tips for avoiding credit card pitfalls:
•Be aware that the card issuer has a great deal of leeway. They reserve the right to change the terms of your card, including the APR (annual percentage rate), at any time, for any reason–with as little as 15 days notice. So check your monthly statement carefully.
•There is no limit on the fee a credit-card company can charge a cardholder for being even an hour late with a payment. That’s due to a 1996 U.S. Supreme Court decision (Smiley v. Citibank) that lifted the existing restrictions on late penalty fees. Today, $30 is the most common late fee, according to the Consumer Credit Counseling Service. Ten years ago, that number was $13.
•There is no federal limit on the interest rate a credit-card company can charge. Take a look at your credit-card statement. Most likely, the return address is located in a states where state governments have weak “usury laws.”
Check out the rest of the list, there’s some good info on it. —MEGHANN MARCO
Plastic Predicament [Newsweek]