10 Ways To Avoid Credit Card Pitfalls

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.

More inside.

•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]


Edit Your Comment

  1. Way #1: Don’t use credit cards!

  2. pronell says:

    Way #2: Only use credit cards for grating garlic:

  3. thejbs says:

    Looking through all my statements this year for tax-time, I’ve paid at least $800 this year in finance charges. I’m finally disgusted with my own habits and my credit card company and I’ve put everything I can into paying the damned thing off. After that I’m going to put as much cash as I can into an Online savings account that actually PAYS ME Interest.

  4. John says:

    Man, I loved Pitfall.

  5. AcilletaM says:

    Way #3: Wait for the crocs to close their mouths before jumping on their heads.

  6. Mr. Gunn says:

    Way #4:Yodel as you’re swinging on the vine.

  7. Chairman-Meow says:

    I just paid-off a 10k cc debt over the last 6 months and boy do I feel relieved that it is no longer hanging over my head!

    Nothing is scarier than to look at a minimum payment of 500 bucks on a 10k debt knowing that 400 of it is going toward interest & fees.

    How did I get into such trouble? Simple: sudden layoff at the company AND I was late on 1 payment. My card smacked my rate from 12% to 25% because of 1 late payment! This sent the amount on the card spiralling out of control.

    Once things got under control, I made 12 months of payments on-time plus I paid-off a vehicle. This in-turn raised my FICO score so now i’m in the good to excellent range.

    so, I call my cc company to get my rate lowered and they refused to budge. So, get this, I applied for a new card at the SAME BANK for 9% interest and got it!

    Took the remaining amount from my old card (@ 25% interest) and dropped it on my new card at 9%. This plus a raise in pay allowed me to make much higher prinicple payments.

    As of next month I owe them one more payment and I am free!

  8. planetdaddy says:

    I was in a similar situation where I was layed off from work and had to use the card to live (MBNA). Eventually I reached the point were I couldn’t make the payments. I called we worked out a deal. They cut my minimum payment. In the end it all worked out. They got payed off, and I have a card with a 6.0 interest rate.

  9. Plasmafire says:

    Hmm pitfall, I have that game, it still works perfectly on my Atari 7800. :)

  10. GHampton says:

    If you have several frequent flier accounts, but have no idea how many miles you have accumulated, it is time to review your accounts. Airlines are shortening expiration periods for inactive frequent flier accounts; if you don’t use your miles soon, you may lose them.

    “This shift in frequent flier miles further underscores the decrease in overall rewards programs that we are seeing in a number of industries,” says Bill Hardekopf, CEO of LowCards.com. “We monitor the rewards offered by credit card companies and there are cutbacks in a number of areas, making it more difficult for consumers to reap the benefits they once enjoyed. We are seeing it with hotels requiring more points in order to qualify for a free room, American Express cutting the rewards points in half for everyday purchases, Citi reducing the cashback rewards on one of its cards, and now airlines decreasing the life of their frequent flier miles. Consumers need to be aware that the terms of many reward programs are tightening up and it could be harder to redeem these benefits.”