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Article Series: Debt
Relief & Debt Consolidation
I Want To Get Rid
Of My Debt...NOW!
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.
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SolveYourProblem.com
: 2007
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