When you get your next credit card statement, pay close attention to the small insert that says "Changes to your credit card agreement." You already know who I'm talking about. It's that small, folded piece of paper with legalese on it that you say you'll read later but never do, or that you just throw away with the other "junk" inserts.
First of all, you need to know that if you use your credit card after getting this notice, you are automatically "agreeing" to the new terms in the notice. To keep these new terms from affecting your account, you must stop using that credit card right away or by the date given in the notification statement.
The most common changes to credit card agreements are new APRs (annual percentage rates), new fees or changes to fees you already pay, or a change to your grace period. The grace period is the number of days that a credit card used to buy something can be paid back in full without a finance charge.
Another trap you should avoid is not knowing or keeping track of the dollar limit on your card. Credit card companies will let you charge a small amount more than your account's limit. But don't be surprised if you get a "over limit fee" on your next statement. This fee is usually $35 or more. Also, if you go over your credit limit, you should expect that your APR will go up.
If you don't make your payment by the due date, your interest rate will also go up. Some businesses think your payment is late if they don't get it by noon or 1 p.m. on the day it's due. You'll also have to pay a "late fee" of $29 or more on top of the higher rate. Make sure to send your payment in the envelope that the company has already printed. The bar code on these envelopes can be scanned by the post office so that the mail can be sent more quickly.
Be careful if you've been counting on those few extra days between when you mail your check and when it clears your bank. Many credit card companies have switched from the old way of processing checks to a new way that is done electronically. By electronically taking money out of your account, this new system cuts the time it usually takes for your check to clear by at least a day.
If you're thinking about paying your credit card bills online, check to see if there are any extra fees for doing so. Recently, one of my credit card companies sent me an email telling me how easy it would be to pay my bills online. At the bottom of the email, there was a note that said, "A fee of up to $14.95 may be charged for this service, and it will be taken out of your checking account." Should I pay 37 cents for postage and mail my payment five days before it's due, or pay now and be charged an extra $14.95? I bet you can figure out which option I chose.
If you take the time to read and understand your credit card agreement now, it will save you money in the long run by keeping you from getting charged extra fees or having your interest rates go up.
