Most people know what credit cards are as well as how to use them, but there are several facts that you should be aware of. Credit cards can be closed without warning even if you pay much more than the minimum monthly payment and they can actually start to harm your credit if you use them excessively. The most important facts that you should know consist of how interest is calculated, how payment history is reported to the credit bureaus, and what the penalties are for failing to make your payments.
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After a credit card has been issued in your name, you will need to make a purchase in order to activate it. Even if you do not use your credit cards regularly, it is suggested that you make periodic purchases so that your accounts remain active and you are less at risk for a credit limit decrease. There are multiple facts about credit cards that you can learn to effectively manage your debt, but many factors that are variable.
Reading Your Credit Card Agreement Before Signing
Before consumers are issued credit cards, they must agree to all of the credit card terms set forth by their card issuers. Although the documentation may be somewhat difficult to understand, it is in your best interest to read your credit card agreement in full. You can also visit the Federal Deposit Insurance Corporation website to learn useful tips on selecting the right credit card for your needs and using credit cards responsibly.
While there are resources on credit cards available to educate the general public, you might want to take a closer look at your own credit card agreements.
Credit card issuers are sued, fined, and sanctioned on a fairly consistent basis, but there is often little recourse for cardholders that have been exploited. Make sure that you fully understand your responsibilities as a credit card customer as well as your rights in case you do not agree with an action that your credit card company wants to take.
Credit Card Terms Can Be Changed at Anytime
According to the U.S. Department of the Treasury, you generally do have to comply with changes in your credit card terms, but you do have options. Before a credit card issuer can raise your interest rates, you have to agree. The same goes for credit card companies that change their fee schedules and amounts.
Although you will likely have to pay higher fees when credit card companies modify their terms, this makes the perfect opportunity to voice your disapproval. Speak to your credit card company about your dissatisfaction and start to look for a new credit card, if necessary. You can threaten to close your credit card altogether if no headway is made, but be prepared to follow through.
Remember that credit card companies have to notify their customers in writing at least 45 days before they increase interest rates. This is why it is important to read all communications from your credit card issuers as soon as they arrive in the mail.
Challenging a Decision Made by Your Credit Card Company
You may not agree with your credit card company’s decision to raise your interest rates, but you will have to agree if you want to continue using your credit card. On the other hand, some credit cardholders have serious disagreements with their credit card companies concerning fraud, identity theft, and merchants.
After you have exhausted your credit card issuers’ internal contact list, start looking at federal agencies and consumers advocates to learn what your rights are in these circumstances.
Because of the recent changes in the economy, credit card companies are being much more conservative about who they do business with. Credit card issuers are regularly decreasing credit card limits, increasing interest rates and closing long-standing credit card accounts for reasons that are not easily understood by consumers.
A mew agency called the Consumer Financial Protection Bureau was established to give consumers more power over big banks. Using traditional venues such as the Better Business Bureau and the Federal Trade Commission may help to make you feel better about a bad decision made by your credit card company; however, you may still be unhappy with the final decision. It is suggested that you reach out to the Consumer Financial Protection Bureau to see if you have other options.
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