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Credit Cards, The Fine Print and the Debt Trap
   

You've applied for a credit card and you like the looks of the deal that they are offering. It is a really good one, with low interest, what else could you ask for? The first impression you get from a credit card offer is always the best that they have to offer. What you don't always see soon enough is the details in the small print. That pesky little bit of information that is always typed so small; you would need a magnifying glass just to read it. A lot of people skip over this information not realizing that this information is the most important and knowing it can be the difference between being in debt and staying out of it.

There are several reasons why so many people get surprised by late fees, overdraft charges, rate increases and old debts being transferred to their current credit cards. Among these reasons are included that they simply just can't read the fine print, that they can't understand all the terminology that is used, couldn't find the important items, didn't know their APR or credit limits, and were unaware of any “universal default” policies. As you can see, one of the first steps in figuring out how the fine print on any credit document is learning the terminology and such.

By familiarizing yourself with the terms that are used than you are one step ahead of most people in avoiding debt by being caught off guard by the fine print and details. As you know most credit card companies offer the best deals in huge letters and special fonts to get your attention. Zero APR, no finances charges for a limited time or free checking are all things that get people's attention. The things that don't get people's attention are the conditions that basically state that the credit card company is in charge and reserves the right to change anything at any time. If you are not aware of this glaring fact from the start, you are bound to end up in trouble.

One of the major things you should consider and look into that is contained in the fine print, is in regards to the APR. Of course, many of you are familiar with this term, because it is one of the things that is offered up front to get you to accept their credit offer. The problem is that if you are offered a low APR up front, doesn't mean that it will stay low in the long run. A lot of these so-called low APR's are only offered for introductory periods and will go up after that, this information of course is contained in the fine print. Also you may see a rise in your APR if you miss one or two payments, that is because another piece of information contained in most fine prints is that they can raise your APR as a penalty for certain things. If you are unaware of this you may end up owing far more than you can afford and leading you into debt.

A lot of people also miss important information in regards to payment allocation. You may assume that your payments will automatically go to pay off things charged at higher rates first, but this isn't necessarily true. The fine print is where you will find any information on what the credit card company decides to pay off first when you make a payment. It is also where you will find any information on whether or not you have the right to request where your payments are allocated or not. Knowing exactly where your money is going and what it exactly it is going towards on your bill can help you avoid going into debt by having a larger bill left then you had planned for.

Be sure to also double check the fine print for any information on the grace period, to avoid late fees, which could raise your bill by a lot more than you, expected and can afford. Credit card companies are legally able to change the grace period from 28 to 20 days without prior notification, as long as it is stated in the fine print. This then cause you to rack up a lot more interest and costs in fees. You must also look for an exact time in the fine print that the payment is due by. Sometimes you could still end up being late in your payment even if you pay on the afternoon of the due date, yet the due time was noon, so be careful about that as well when looking at the fine print. Along with these you need to double check on any fees for overdraft protection or cash advances, you don't want to get caught unawares. As you can see, if you are careful and do your best to read the fine print on your credit card company you can avoid the many loopholes that can cause you to fall into the debt trap. It can take a lot to really look into all the fine print, but in the end it could well be worth it.

Click here if you are drowning in credit card debt, facing foreclosure, being harassed my debt collectors or simply feel like a victim of this economic crisis. It's my SolveYourProblem recommendation.

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by SolveYourProblem.com : 2007

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