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The Issue of Hidden Credit Card Costs and You

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Published: 09Mar2009
Word count: 400
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It cannot be denied that credit cards are a part of life and surival. We use it in buying groceries, clothing, paying utilities, purchasing airline tickets, making hotel reservations, etc. But many consumers who own credit cards fall in the trap of bad debt and financial trouble. Why?

According to the Government Accountability Office (GAO), a lot of credit card holders do not realize that occasional misses or delays with their credit card payments can cost them extra bucks on interest rate and penalty charges.

In a study conducted by the GAO, it has been found that leading swipe cards in the market use confusing terminologies in their Terms and Conditions. Included in this study are Citibank, Discover, Chase Bank USA, Bank of America, MBNA America, and Capital One Bank.

Misleading Credit Card Conditions

Credit card companies are required by the law to disclose all fees in their card agreement. However, some statements may be vague or misleading. Add to this, the Terms & Conditions are often written in very fine print making them difficult to read. But if you won't spend time reviewing your contract, you could end up with a card that imposes unreasonable rates.

If some terminologies or phrases are unclear, don't hesitate to call the credit company and ask for a detailed explanation. As a consumer, it is your right to understand everything associated with your credit card.

Using a Credit Card to Your Advantage

Aside from misleading conditions, it has been found that many credit issuers today impose unreasonable rates and fees. If you take a look at cards in the market, most use the variable rate system of calculation. As a result, many cardholders have found themselves stuck in bad credit and the number is expected to increase in the coming years.

As a consumer, it is your duty to research for a credit card that would serve you best. Don't just rely on what the ads tell you. Use your senses. Research. Investigate. Inquire. Compare. Only by doing these steps can you find a credit card with reasonable terms.

Finally, upon finding the right credit, it is important to keep your lifestyle simple and think ten times before you use your credit card. Owning such card should be taken as a serious and wise responsibility. Failing to keep up with your responsibilities as a card holder could lead to debt, financial trouble and depression.

Liz Roberts is a loan consultant with NewHorizon Finance and has been providing consumers and business owners with financing since 1989. Join our mailing list for FREE tips on credit repair . We also have a list of recommended guaranteed approval credit cards.

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