Credit Card Terms - What to Watch For

There are some credit card terms that can be especially problematic that you should be on the look-out for:

• Two-Cycle Billing
  Think you paid off your credit card? Think again. More and more credit card companies are using what is called “Two-Cycle Billing” which penalizes customers who occasionally carry a balance If you didn’t get the full balance paid last month, but paid it off this month you would expect not to have to pay any finance charge this month. Not so. With the two-cycle billing system, if you do not pay your balance in full last month, you will have an interest charge this month for the amount that carries over, even if you pay it in full this month.
• Universal Default
  Universal default means that your credit card company can raise your interest rate if you’re late on another credit card or bill. In other words, if your credit-history takes a hit, so will your interest rate.
• Over-Limit Fees
  If you have maxed out your credit card but continue to charge, don’t expect the charges to be declined. No, your credit card company is more than happy to charge you an over-limit fee of $30 or more each time you go over your credit limit.
• Close Early on Due Dates
  Many credit card companies now consider your payment late if it arrives on the due date after a certain time of day, not withstanding the fact that the mail never arrives before that time. Late payments will incur a late charge and can, of course, jack up your interest rate.