It is quite tough to agree that you do not know of any secrets about credit cards. You have been using plastic money ever since you can remember (for most part of it) and now there’s nothing you do not know about it, right? Well, if you ask me I think it’s a bit too early to say that. At least not until you have read through this article to the last word. So, you ready to move forward to reading this post? Yeah, I thought so.
Paying balances first is prudent
Majority of us credit card users already are aware of the dangers of availing a cash advance on our cards. But probably very few of us know a secret about cash advances. The credit card company will always give first priority and preference to standard purchases.
So no matter how quickly you may have paid off the cash advance that you availed on your credit card in a desperate attempt to get rid of the cut throat interest rates, you will never succeed in freeing yourself from its claws if you carry a balance.
So this means that your cash advance will continue to be considered as unpaid debt until you pay off the outstanding balance on your credit card purchases. And need I remind you that cash advances are charged up to 29.99 % interest until they get paid off in total?
It is tough to keep a secret from your credit card company
Have you read your credit card agreement in full detail? I doubt it; because I am sure you have not yet read about the Universal Default Clause yet. What this means in layman terms is that your credit card company has the right to hike the interest rates applied to your credit card, at any given point of time, if they get wind of your financial secrets (at least you thought that it was a secret).
What is this secret? If you have defaulted on payments of any of your loans like auto loan, home loan or personal loan (from banks which have no relation whatsoever with your credit card provider), your credit card company will find this out and will automatically brand you as a ‘high risk’ customer. And you know that ‘high risk’ is not a pretty label to carry around in the credit card industry. No matter how old your account with the credit card company is, you are suddenly thrown down from the pedestal of ‘loyal customer’ to a deplorable ‘high risk’ category.
Your creditors’ address could affect your interest rates
Have you ever imagined that the address where your credit card company is located can influence the interest rates that they charge you for providing service? Well, there are States like Delaware and Utah have no cap on the interest rates that credit card companies are permitted to charge. Blame it all on weak Usury laws, but if your credit card company is incorporated in States which have no cap on the interest rates, then they could charge you through the roof or hike their current rates of interest without breaking any law.
Didn’t I say that I knew of 3 secrets you never knew about credit cards?
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