Five Credit Issues to Avoid
Here are some credit issues to pass up. Read more to learn about ways you can avoid paying extra on your credit cards and focus on just paying what you owe.
Everybody’s favorite fee to avoid. If “just pay on time” isn’t doing it for you, try these:
Set up automated payments. If your billing cycle works out so that the bill is always due on the 23rd or the third week of the month, set up automatic bill pay at your bank to start processing your payment in advance, maybe on the 15th or in the second week (allow five business days for your payment to process online).
Pay the bill as soon as it arrives. Whether you get a statement online or electronically, don’t give yourself the chance to forget about paying it until you see a late penalty on your statement.
Have your credit card interest rates gone up this year? If you’re shaking your head no, have you checked your statements and read the fine print to be sure? Despite credit card reform, some interest rates have risen.
Under new laws, credit card issuers must give 45 days' notice before raising rates. But beware the loophole: variable-rate cards, with rates that go up and down, are exempt from these rules. So some credit card companies are moving more consumers into such cards, and they can expect a corresponding jump in their rates.
Lower credit lines
At the same time, you may have tried to charge something but been told by a merchant that you were overlimit. Companies have been reducing consumer credit lines.
New annual fees
Some credit card companies that didn’t charge cardholders annual fees have begun instituting them in an effort to make up revenue lost elsewhere. Check your statement to make sure you’re not paying any new or extra fees. If the annual fee is low enough, or the rewards you’re earning are worth it, stay put, but if not, you might do some comparison shopping.
Now that you know more about credit issues to avoid,
get your credit report & score.