- Partial Payment: Some cards require that the entire amount be paid in full. Otherwise, interest is charged on the full amount, not just the amount outstanding.
- Currency Conversion Fee: Currency conversion fee charged for foreign purchases.
- Interest Rate Increases: Credit card issuers can and do increase rates at their discretion.
- Payment Due Date: Companies take 3-5 business days to process payments. A late fee is charged if the payment was processed later than the due date.
Credit cards provide valuable benefits: a free loan for 20-40 days, purchase protection, air miles or rewards or points or cash-back, extended warranty, auto rental collision insurance etc. Consumers can enjoy these benefits and not pay a cent if they follow strict rules:
- Never carry a balance on the credit card. There are far cheaper ways of borrowing money (like a line of credit at a local bank).
- Never borrow from the credit cards. Shred the “convenience checks” that regularly appear in the mail. Avoid using the credit card at ATM machines.
- Avoid having to pay fees of any kind: late fees, fees for exceeding the credit limit, annual fees etc.