1/22/2014 4:15 PM ET|
8 costly mistakes on your credit card agreement
When it comes to your credit cards, it can pay big to read the fine print closely.
Even after scouring the web for the best credit card offer, your choice might still end up costing you more money than you expect. In some cases, unexpected fees and penalties can land you upside down on an otherwise great deal. Other times, a benefit buried among your card's features could have allowed you to eliminate another expense. Watch out for all eight of these ways that you could be leaking cash from your household budget.
1. Losing your rewards points and rebates
According to the Federal Reserve Bank of Chicago, most rewards credit card customers earn about $25 in points or rebates every month. However, your bank can void your rewards balance if you miss a payment, exceed your credit limit or violate just about any rule in your agreement. If you've been using your rewards balance as a shadow savings account for travel planning or holiday shopping, monitor your account so you don't accidentally lose your rewards.
2. Paying retroactive interest on zero-percent offers
Although we tend to see this issue with retail credit cards more often than on other types of accounts, it can still cause your wallet plenty of pain. If you purchased a big-ticket item during a special "no interest, no payments" promotion, read the fine print closely. Some credit cards will assess you a finance charge at your account's maximum rate for the entire original purchase if you fail to pay off that promotional balance before a deadline. That deadline might not coincide with your account's statement cycle, either.
3. Settling for a late payment fee on your statement
Mistakes happen to everyone. However, it's still legal for card issuers to assess a significant late fee when you're behind on your bill by just one day. When this happens to you, and you're not in the habit of missing your payments, call your credit card's customer service hotline and calmly request that the fee be waived this one time. Most service agents are empowered to make that happen. In fact, the Discover it and Citi Simplicity cards have made that a major part of their marketing campaigns.
4. Paying twice for car rental insurance
At the airport rental car counter, your clerk can't wait to explain all the things that could go wrong before you head out on unfamiliar roads. Fortunately, carrying the right credit card means you can usually ignore the sales pitch for comprehensive coverage. Many credit cards cover any costs or deductibles your own insurance won't pay after a rental car accident.
5. Failing to notice charges for services you don't use
Incremental fees for services like credit monitoring and payment protection plans can creep up on you. Federal regulators slapped Chase with fines and penalties for tacking add-on services to some customers' accounts without permission. However, it's more likely that you opted in to a monthly charge when you activated a new card or accepted a rewards offer over the phone. Check your statement for small charges that often get lost among all your other transactions, then call to cancel services you don't think you'll ever use.
6. Buying sports and concert tickets from a scalper
Don't settle for paying exorbitant ticket prices at a ticket brokerage or in the venue's parking lot. Many credit card issuers now offer exclusive pre-sale periods for concerts, sporting events and theatrical performances. Early access doesn't just mean a better selection of available tickets -- it reduces your wait time online or on the phone with ticket sellers. In fact, a handful of elite cards provide concierge services that can even handle your booking for you.
7. Paying for too much roadside assistance
Your car manufacturer, your insurance company and even your cell-phone carrier all offer monthly plans for short-range towing, jump starts and lock-outs. Before paying extra for access to these dispatch services, check your credit card's list of member benefits. Many Visa Signature and American Express cards, along with premium cards bearing the Discover and MasterCard logos, offer free or deeply discounted roadside assistance services.
8. Paying too much for big-ticket items
That gadget, outfit or piece of jewelry doesn't seem so sparkly when you see it go on sale weeks after your purchase. Instead of suffering buyer's remorse, make those purchases with a credit card that offers price protection as a cardholder benefit. For instance, cards with Citi's Price Rewind program will automatically track your registered purchases. If your retailer offers a price drop of more than $25 within about a month after your initial transaction, Citi will get you a statement credit for the difference.
Credit card deals can change frequently, but your bank must notify you in writing if they plan to substantially change or eliminate any of your card's key features or benefits. When you're shopping for a new credit card, look past the big numbers on the signup offer to find out whether your potential offer will save you money or set you up for hidden costs.
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Amazing how many idiots vilify the credit card companies for being "predatory." Credit cards are tools, use them wisely. Don't charge more than you can afford to pay off each month. Freaking morons.
I love my credit cards, pay my balances in full every month and I am raking in thousands of dollars in store gift cards every year just for using credit cards to pay my business expenses and purchases wherever possible.
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