5 New Tips of Credit Card Management
On the credit card front, a new study by CardHub finds that while card companies are more transparent than they were a year ago, information isn’t as plain and simple as it could be. “Information related to rewards redemption and information on the balance transfer fee continue to be the areas with the most deficiencies across the board,” according to the study.
So, credit card legislation has come and gone — just like the hurricanes — but the remnants are still being felt.
Perhaps all the news over the past few months has me scrutinizing credit card statements on behalf of consumers, but I noticed that the language on the American Express statement says “please pay by.” I wondered: was this an actual due date or an effort to get consumers to pay their bills earlier?
With that in mind, I decided to ask some questions and find new tricks and tips to help consumers weather their credit cards. Here goes:
True due date: Not all due dates are the same. While most card issues give a stated due date — a true due date by which you must pay or be hit with a late fee — American Express offers a “recommended date.” This is not an actual due date but a suggested date that is actually a full 15 days before the actual due date. In other words, while you might think your bill is due October 5th, you actually have another 15 days to get it in before it’s considered late. Surprised? An agent told me the recommended date is designed to make sure you get it in on time given the slowness of snail mail.
If due dates leave you stressed, simply move them all to the first day of the month or some other convenient date, such as when you get paid. Yes, you can usually change the due date and save yourself some extra worry. Just call your issuer, and be sure they give you the go-ahead.
Late fees: Although typically based on your outstanding balance, late fees are now as high as $35 for balances as low as just $250 on a Citi Credit Card. But you can typically avoid it by calling the card companies and making a payment by phone. At Bank of America, for example, you can now pay free by phone so long as you make the call by 8 p.m. Eastern on the due date. The cost previously was $15.
Alternatively, if you are hit with an unexpected fee, perhaps due to an emergency, call your issuer and ask if they’ll waive it. They often will for those longtime customers, even more than once.
Dings to your credit report: A ding to your credit report can hurt your credit score and future borrowing rates, so it’s important to know when your card issuer reports any late payments. Typically, if you’re 60 days late, they’ll notify the credit bureaus, but it could be even less. At American Express, if your card is a personal card and not a business card, you have 30 days to pay.
“If you’re an existing customer who’s been late just one time, even if a day late, that can trigger some actions, such as increasing your rate,” says Bill Hardekopf, CEO of LowCards.com.
However, issuers cannot increase rates for new card holders in the first year unless you’re a full 60 days late.
Forfeited rewards and points: Of course, paying your bills on time helps you avoid not just higher interest rates, dings to your credit report and additional finance charges, but even a loss of rewards you may have earned for the month.
According to Hardekopf, Capital One cardholders will lose any rewards applied to a balance during the billing cycle that contains a late fee. If you want to get those rewards back, some issuers will charge a reinstatement fee. At American Express, the fee is $29 for each month of reinstated points or miles, once you have paid the minimum due. Check out latest offers on Credit Cards
“Make sure the points are worth the fee,” says Hardekopf, author of The Credit Card Guidebook. “A $29 fee may be much more than your points are worth, so you may be throwing money away. Points are worth about a penny for most reward programs.”
Overseas buying: Did you travel overseas or do you plan to? Using your credit card may cost you about 3% on your purchase price for foreign exchange, or another $3 for every $100 charged.
One way to avoid it: ask about travel-friendly cards, especially if you head overseas frequently. American Express’ Business Platinum card, for instance, waives all foreign exchange fees on purchases made with the card. It does carry a $450 annual fee, but that includes other privileges, such as access to global airport clubs.
(Source: marketwatch.com)
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