Credit Cards

Do you know the rate of interest you’re being charged by your credit card company? When you received the “zero percent on all balance transfers for six month” offer, it seemed like a great deal. However, what rate of interest are you being charged now? You might be very surprised to see a number approaching, or greater than, 30% – that’s right 30% annual interest.

If your credit card company received your payment, even one day after the due date, you may have been placed into a first tier default interest category. Therefore, what started off as zero percent and then became let’s say 7.5% after the six month introductory period, may have now jumped to 18% because you paid after the due date. Miss another due date, and your rate of interest is now 26.99%.

Wow, one late payment on your credit card and the card hits you with an increased interest rate. Here’s what makes this situation even worse. When your other creditors obtain a copy of your credit report as part of their review process, they see that you were late on one card. Even if you’ve never missed the due date on their specific card, there is a good chance they too will increase your interest rate because you are perceived to be a greater credit risk by missing the payment due date on a completely different card. Seems real fair, doesn’t it?

Adding insult to injury, when you missed the due date on the first card, in addition to increasing your interest rate, you may have been assessed a late fee. These can be as high as $39. Add the late fee to the astronomical interest rate and the imputed rate to the lender becomes usurious, although not by legal standards.

Bottom line, look at your credit card statement, see what your interest rate is, and if it appears to be too high, call me for help. I may be able to take a few simple steps to get your interest rate back to a reasonable level.

Continue to read the blog as I’ll probably talk about President Obama’s Stimulus Package during the next few weeks.


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