Monday, July 05, 1999

Credit card terms can be costly

Louisville Courier-Journal

        Besides the annual interest rate, what do you really know about your credit card?

        If you haven't kept tabs on your credit card's “terms and conditions,” be wary.Issuers are finding ways to squeeze out extra fees and charges.

        For example:

        • Fixed rates. You may have been lured into a low-fixed-rate card, but card issuers reserve the right to change rates with 15 or 30 days' notice. Also, if you have a low, introductory interest rate, you know that at the end of the initial period, a higher rate will take effect.

        • Grace periods. Used to be, you had 25 to 30 days to pay in full to avoid finance charges. But in many cases, the grace period has shrunk to 20 days, or less. And if the clock starts at the end of the billing cycle, by the time you get your bill, your grace period may be only a few days.

        • Late fees. Some issuers might allow 15 days after the due date before imposing a late fee and charging interest. But the “leniency” period is also shrinking, and the late fee itself is rising, from $12 or $13 just four years ago to a current average of about $26.

        • Other fees. Expect an over-the-limit fee in the $20s; if you always pay in full, you might get hit with an inactivity fee; and figure about $29 if your check bounces.

        • Penalty rates. If you're late with a payment, your cushy, low interest rate could suddenly be jacked up to as high as 25 percent, or more.


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- Credit card terms can be costly