Avoid Trouble With Credit Cards

Credit cards can be attractive tools to use when making large purchases, but they can also cause more problems than what they are worth. When using a credit card, it is possible to get into trouble if the card is used frivolously. Before using a credit card, it is important to understand some of the common pitfalls that come with their use.

Accumulating Debt

One of the most common problems that happens with this type of account is a large accumulation of debt. Consumers have to do their best to pay down their credit card balances as soon as possible in order to avoid problems. When a credit card balance is left on the account for longer than a month, the credit card company charges interest on the balance. In many cases, consumers leave all or a portion of that balance on the card for multiple months at a time. When this happens, the interest charges keep on accumulating and the debt continues to get bigger.

With the easy availability of cards and how easy they are to use, many consumers find themselves in thousands of dollars of debt without much trouble. Once the debt has been accumulated, it can be very difficult to pay off in a timely manner. When only making the minimum payments on their cards, many consumers find that it takes many years to pay off the debt.

Late Fees

Another issue that many consumers have to deal with is paying late fees. Each month, a credit card company expects its cardholders to make minimum payments. If these minimum payments are not made, late fees are charged by the credit card company. These fees can add up quickly and they can add to the total amount of debt that is already on the card.

Credit Damage

In addition to having to pay late fees, many consumers end up hurting their credit when they do not make their payments on time. When a credit card payment is missed, the credit card company reports this to the three major credit bureaus. This information is added to the credit report of the consumer and it stays there for an extended period of time. Once a late fee is added to a credit report, it lowers the credit score of the individual. This makes it difficult to get approved for financing in the future. If the consumer is approved for financing, he may have to pay a higher interest rate than normal. This ends up costing the consumer money in the form of a late fee on the card and money in interest in the future.

Misunderstanding Terms

Credit card companies are in the business of making money and they often use confusing terms to increase their chances of making more money. For example, when a credit card company offers an introductory interest rate of zero percent, this rate is often contingent upon the consumer making his monthly minimum payment. If one payment is missed or the payment arrives late, the interest rate may revert back to a much higher rate. At that point, the entire card balance may have interest charged to it. Many consumers do not understand these terms at first and end up getting burned by them unexpectedly at some point in the future. Before getting a new card, it is important to read the terms carefully so that they are completely understood.

To find the best credit card rates and offers visit http://www.creditcardrates.com

EasyPublish this article: http://submityourarticle.com/articles/easypublish.php?art_id=258408

Free Flash TemplatesRiad In FezFree joomla templatesAgence Web MarocMusic Videos OnlineFree Website templateswww.seodesign.usFree Wordpress Themeswww.freethemes4all.comFree Blog TemplatesLast NewsFree CMS TemplatesFree CSS TemplatesSoccer Videos OnlineFree Wordpress ThemesFree CSS Templates Dreamweaver