Federal Law requires all credit card companies to state all fees and costs they require from their clients.
However, not all fees are declared unless you review the Policy Agreement or the Terms and Conditions of the issuer.
In 2011, a law called the Dodd-Frank Wall Street Reform and Consumer Protection Act limited the fees that a credit card company could charge. This resulted in the credit card companies CREATING a new set of fees to recoup their lost revenue.
Another law created to help you protect you is the 2009 The Credit Card Accountability, Responsibility, and Disclosure (CARD) which made the credit card companies create & send you reports that clearly state their fees. This is the law also stopped one of the worse practices credit card companies had for making money from their clients. Lets say you have an American Express card and you miss a payment. You would expect that your American Express interest rates would go up. You were late. Makes sense. But what they would do prior to this law is that lets say you have a Capital One card, Bank of America Credit card and Citibank card too. These companies would ALSO increase your interest rate even though you were NOT late paying them!
A credit card offer may seem attractive at first glance but upon checking the terms and conditions, you will be surprised to discover unreasonable fees and hidden costs. Some of the more common hidden fees are:
For example, a credit card may have a low APR but later on, your interest rate could balloon as soon as the introductory period is over. Expensive annual fees, late penalty and over-the-limit fees can also add unnecessary burden to you.
Take note that there are credit cards that don’t give the full 30 days of grace period.
Some cards do not even offer a grace period. Having sufficient grace period is important so you can pay back your balances without incurring additional interest rates.
Apart from these fees, you credit card issuer may also change your current rates based on your payment history. If you’re often late in submitting your payments, your interest rate can increase. You can also get disqualified from earning rewards so it’s crucial to pay close attention on your due dates.
Be sure to read mails or notices that your credit card company sends you.
You may be given the 15-day notice about changes in fees any time. These changes will give you the chance to call your credit card company and ask for clarification.
Taking time in choosing your options is very important to find the right credit card. There are credit cards in the market that offer reasonable rates and it is up to you to find them.
