We like to appeal to the better angels of our nature, but there are plenty of instances in which this simply cannot apply. In the case of credit card companies, many of the offers, stipulations and terms we agree to are not as ironclad as we like to believe. With so much fine-print included in credit card agreements, it can be easy for cardholders to overlook certain terms and conditions that can adversely impact them in the future. If you currently own a credit card and have wondered about ways in which your credit card company may be able to trick or otherwise deceive you in the future, then continue reading to find out about four common things that they will not tell you upfront.
Grace Period Trickery
In the past, most credit card companies offered a 30-day grace period: if you paid off your expenses within one month, no interest would be accrued. These days, though, an increasing number of credit card companies have altered their policies to shrink or eliminate the grace period. In many cases, the grace period now ranges from fifteen to twenty-five days, while some companies have decided that the grace period is “no longer needed”. Whether you just signed up for a new card or have had one for years, it is worth your time to verify whether or not the grace period still exists.
The Domino Effect of Penalties
Credit cardholders know the typical repercussions that can occur when a credit card bill is not paid on time, but more and more instances of multiple-card penalties have appeared in recent years. If your interest rate suddenly rises on one credit card, this can profoundly impact your credit and cause a subsequent penalty increase across multiple cards. Even if you have paid your other credit cards on time consistently, one late payment can trigger a domino effect of penalties across all lines of credit.
Double Trouble for Late Payments
As mentioned above, late payment can trigger a higher interest rate on your credit cards. After the CARD Act was passed in 2009, credit card companies now have the ability to charge late payments with a $35 fee plus a penalty rate up to 29.99%. The penalty rate will disappear after six months of payments being made on time, but this is nevertheless an unfortunate convenience – and one that is often never disclosed when applying for a new credit card.