Playing With Credit
Debbie WilsonLoanBiz Columnist
Recent congressional pressure has forced credit card issuers
to become a little more consumer-friendly. Citicorp has quit using
"universal default" and Chase has stopped using the "two-cycle
billing". But that doesn't mean they can't still make plenty of money from
your account if you aren't paying attention. A little information and effort
can help.
Credit Card Late Fees
According to the Government Accountability Office, 35
percent of cardholders paid at least one late fee in 2005. The average late fee
charge was $34, compared to $13 a decade earlier. But what does this mean for
you? Even if you can't cover the bill in full, send the minimum payment by the
due date.
Request Lower Interest
Believe it or not, creditors will negotiate. If you've been
a reliable client with a solid credit profile, there's no reason to settle for
a credit card with a rate of 15 percent or more. Call customer service and
politely but firmly state: "Given
my strong credit history and the fact that I pay my bills on time, I feel the
interest rate on my credit card should be reduced to 8 percent. If you can't do
that, I intend to take my business to a lower-interest card." Then, if
your current credit card company refuses, either pay off your balance or transfer
it to a new credit card. Then close the old account and don't use that card
again.
Eliminate High-Rate Balances
If you're dealing with multiple credit card balances, always
pay the minimum due on each, and add more than the minimum on the card with the
highest interest rate. Concentrate on getting rid of the debt on that card,
then move on to the card with the next highest rate, and so on, until you're in
the clear! Then stay debt free and financially wise for years to come.
Sources:
Government Accountability Office
About the Author
Debbie Wilson owns and operates a lakeside resort. Her previous experience includes profitability consulting for a national healthcare company. Debbie holds a B.A. in Business Management with a minor in Physical Education.
