Common Credit Card Traps and How to Avoid One

Common Credit Card Traps and How to Avoid One

Lately, a lot of bad things keep on happening in the Credit Industry. One can blame the economic downturn for this. But in the same way that people have bad credit here and there, credit card companies devise ways on how they can trap their consumers into spending more than what is necessary. Unsuspecting consumers fall into the trap easily which eventually causes them to have a need for repairing bad credit, increasing credit score and the like. The best weapon that any consumer can have is knowledge. There is no better way to avoid these traps other than arming yourself with the knowledge that can help you cut the credit traps before it gets hold of you.

Interest Rates- among all the credit card traps, this is the most commonly used. Defaulting on a payment means you don't have an idea about the actual and exact interest rate that they will charge to your account. For instance, they can charge your defaulted account by either 5% or 25%. If you are serious about avoiding or repairing bad credit, you need to be up and alert when it comes to your due dates and the like. If you can't avoid paying late, it is best to iron this out in as early as possible with you credit card issuer. If you lay your cards on the table and tell them about your situation, you will increase your chance of having them understand your side. Therefore avoid getting bad credit rating due to your late payment.

Grace Period- this is another credit card trap that any borrower should be aware and careful of. You may think that you have a 15-day grace period and you structure your funds according to it only to find out that you are wrong about it. This miscalculation of grace period can cause bad credit and if one is repairing bad credit, it is best to be aware of the exactness of these things first.

Other than the ones mentioned in this article, there are a lot of credit card traps utilized by credit card companies. That is why you need to be very carefully when it comes to the specifications of your account. You credit card account is not just like any appliance where after buying, you get rid of the manuals without even bothering to read it. As for credit cards, you need to read each and every clause of the contract otherwise you might find yourself struggling to pay for a huge debt or anxiously repairing bad credit.

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