Your Credit Card May Be Costing More Than You Think!

Do you know what your credit card is truly costing you? Manypeople assume that they do, but aren't familiar with thehidden fees that many credit card companies are charging. Infact, if you don't keep close tabs on your credit card, youmay end up paying hundreds of extra dollars per year-withoutever really knowing it!

And if you're trying to budget your money, those hidden feescan add up!

Let's take a look at some of the most common credit cardfees, and then talk about how you can avoid them.

Grace Periods

In the past, we could always count on grace periods before weever had to start paying interest. For example, if wecharged our card to the limit, and could get it paid offbefore the grace period expired, then it would be like a freeloan-we wouldn't have to pay any interest.

Unfortunately, the credit card companies are making thisharder and harder to do. For starters, many of them havereduced the traditional 30 day grace period to 20-25 days.

If you hold a credit card, but didn't realize this, thenyou're likely paying interest without even knowing it! What's worse is that more and more credit card companies areeliminating grace periods altogether. That means if youcharged lunch today at noon, at 12:01 pm, you would bealready paying interest on it.

How about your credit card? You need to take a close look atthe fine print and find out what kind of grace period youhave. If your credit card company has reduced itsignificantly, or eliminated it altogether, you shouldseriously consider canceling it and getting a moreuser-friendly card.

Late Fees

When is the last time you checked to see what amount yourcredit card company charges you for a late fee? The truth isthat these fees have doubled in just the past ten years, andthat, combined with the reduced grace period, means that thecredit card companies are raking in a lot of dough on latefees!

If it's possible, you should try and send off the check (orelectronic transfer) the day that you receive your creditcard bill. There are three reasons why it's important neverto be late. The first is obvious; you will want to doeverything in your power to avoid a hefty late fee. Next, ifyou are late, it will likely be reported to the credit agencyand you will have a bad mark on your credit report. Thethird is the direst, and we'll discuss it below.

Interest Rate Hikes

Did you know that if you are late--even one time-on yourcredit card payment, the company will in all likelihood raiseyour interest rates? That's right; one late payment givesthem the right to do it. What's more, that isn't justlimited to your credit card payment. Any late payments fromany lender that show up on your credit report gives them thejustification to raise your rates, so be careful!

Copyright ©2005 by Michael Ambrosio. You may publish this article on your site or in your newsletter provided thisresource box remains in tact. Michael Ambrosio is the authorof many credit related articles. Visit his website today:http://www.yourcreditandyou.com and rebuild your credit.

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