What You Should Know About Credit Card Terms
Credit card companies keeps pushing hard to get more customers daily by giving pre-approved card offers to would be clients through mail. Chances are youve gotten one of this offers in your mail in recent days. Such promotion has being in existences long before now. Though getting such card is good to some extent and getting one will be helpful however, you dont have to rush getting one without considering the plan terms associated very well.
There are lots of plan terms that you really need to study very well while shopping for credit card if you are not ready to put yourself in financial prison. These terms affect your overall cost. In this article we will take a look at some of this credit card plan terms you need to consider before choosing a company to deal with. Get a cup of coffee while we discuss each of terms you need to consider.
Consider a company that gives free period or grace period over others. Because without free period, the card issuer may impose finance charge from the date you use your card or from the date each transaction is posted to your account. Free period allow you to pay back your balance in full before due date in other to avoid finance charges and its usually mail at least 14 days before the due date, giving you enough time to pay.
Another very important term to take note of is APR (Annual Percentage Rate) which is the measure of the cost of credit, expressed as a yearly rate. APR often changes when there is a change in interest rates or other economic indicators. Still companies must disclose this before you open the account and on your account statements.
Apart from the annual percentage rate, you need to consider how much the issuers charges for membership fee. The annual membership or participation fees varies, its often between 25 and 100.
You also need to know about method issuers will use in calculating your finance charge if you dont have a free period, or if you are expected to pay for purchases over time. Knowing this will help you keep your finance charge low by measuring your buying patterns and paying back on time.
Some card issuing companies charges transaction fees and other minor charges when you make late payment, get advance cash with the card or exceed your credit limit. As a matter of fact some even charge monthly fee whether or not you use the card.
What To Look For In A Balance Transfer Credit Card
What To Look For In A Balance Transfer Credit Card
When shopping for a new balance transfer credit card, take the time to compare a number of credit cards, as the terms and conditions of these offers varies greatly. There are numerous things to consider before you take this step of choosing a new card. Be sure to read the fine print.
First, you need to have a plan on why you’re applying for this new balance transfer credit card. If it’s to consolidate two or three credit card balances from higher interest credit cards to a card offering an introductory 0% APR, there’s more you need to know. Some issuers charge a fee for each balance transfer transaction. This can amount up to 3%, or a flat fee of 35.00 for each transfer. So if you have a number of account balances you want to consolidate, you need to figure this charge in also.
Some financial institutions only offer the 0% APR on the balance transfer amount and not on new purchases. So if you’ve transferred balances to this new credit card, and then you use the credit card for new purchases, when you make a payment it is applied toward the lower APR balance and you’re assessed interest on your new charges. It isnt until the balance with the lower interest rate is cleared, that your payments are then applied toward the newer charges with the higher interest rate.
Another thing to take into consideration is the balance limit on the new balance transfer credit card. Is it enough to cover those other credit card balances you want to consolidate? If the credit limit isn’t high enough, they won’t transfer the whole amount. In addition, you wouldn’t be able to use the credit card as it would take you over your credit limit. Again, read the fine print. Going over your credit limit would take you out of the terms and conditions of the credit card, thus voiding the special introductory offer. The penalties can be steep.
You also need to know if there is an annual fee for this new balance transfer credit card. If there is a fee, that would have to be taken into consideration when determining any savings you might realize by consolidating your debts into a new balance transfer credit card.
Now, don’t get me wrong, a balance transfer credit card can be a good thing and work to your benefit. With a definite purpose of eliminating some of your debt and then sticking to your plan, a balance transfer credit card with a 0% APR valid for several months, can save you a lot of money in interest payments.
Ever Receive A Credit Card In The Mail?
Federal law prohibits issuers from sending you a card you didn’t ask for. However, an issuer can send you a renewal or substitute card without your request. Issuers also may send you an application or a solicitation, or ask you by phone if you want a card – and, if you say yes, they may send you one.
Cardholder Protections
Federal law protects your use of credit cards.
Prompt Credit for Payment. An issuer must credit your account the day payment is received. The exceptions are if the payment is not made according to the creditor’s requirements, or the delay in crediting your account won’t result in a charge.
To help avoid finance charges, follow the issuer’s mailing instructions. Payments sent to the wrong address could delay crediting your account for up to five days. If you misplace your payment envelope, look for the payment address on your billing statement or call the issuer.
Refunds of Credit Balances. When you make a return or pay more than the total balance at present, you can keep the credit on your account or write your issuer for a refund – if it’s more than a pound. A refund must be issued within seven business days of receiving your request. If a credit stays on your account for more than six months, the issuer must make a good faith effort to send you a refund.
Errors on Your Bill. Issuers must follow rules for promptly correcting billing errors. You’ll get a statement outlining these rules when you open an account and at least once a year. In fact, many issuers include a summary of these rights on your bills.
If you find a mistake on your bill, you can dispute the charge and withhold payment on that amount while the charge is being investigated. The error might be a charge for the wrong amount, for something you didn’t accept, or for an item that wasn’t delivered as agreed. Of course, you still have to pay any part of the bill that’s not in dispute, including finance and other charges.
If you decide to dispute a charge:
Write to the creditor at the address indicated on your statement for “billing inquiries.” Include your name, address, account number, and a description of the error.
Send your letter soon. It must reach the creditor within 60 days after the first bill containing the error was mailed to you.
The creditor must acknowledge your complaint in writing within 30 days of receipt, unless the problem has been resolved. At the latest, the dispute must be resolved within two billing cycles, but not more than 90 days.
Unauthorized Charges. If your card is used without your permission, you can be held responsible for up to 50 per card.
If you report the loss before the card is used, you can’t be held responsible for any unauthorized charges. If a thief uses your card before you report it missing, the most you’ll owe for unauthorized charges is 50.
To minimize your liability, report the loss as soon as possible. Some issuers have 24-hour toll-free telephone numbers to accept emergency information. It’s a good idea to follow-up with a letter to the issuer – include your account number, the date you noticed your card missing, and the date you reported the loss.
Disputes about Merchandise or Services. You can dispute charges for unsatisfactory goods or services. To do so, you must:
have made the purchase in your home state or within 100 miles of your current billing address. The charge must be for more than 50. (These limitations don’t apply if the seller also is the card issuer or if a special business relationship exists between the seller and the card issuer.) and,
first make a good faith effort to resolve the dispute with the seller. No special procedures are required to do so.
If these conditions don’t apply, you may want to consider filing an action in small claims court.
Shopping Tips
Keep these tips in mind when looking for a credit or charge card.
Shop around for the plan that best fits your needs.
Make sure you understand a plan’s terms before you accept the card.
Hold on to receipts to reconcile charges when your bill arrives.
Protect your cards and account numbers to prevent unauthorized use. Draw a line through blank spaces on charge slips so the amount can’t be changed. Tear up carbons.
Keep a record – in a safe place separate from your cards – of your account numbers, expiration dates and the phone numbers of each issuer to report a loss quickly.
Carry only the cards you think you’ll use.
