Save unnecessary expenses on "hidden" charges by credit cards...

According to the Federal Law a credit card should not bear any hidden cost for the card-holders to pay. However, it has been seen that all card holders are not fully acquainted with the kind of fess that are charged on their cards and what amount of payments actually increases their interest rates and installments and the instances for which they are charged. A credit card statement has so many fine prints that it is quite easy to overlook the minute details of payments being demanded through the statements. This is what we call “hidden” charges.

An advisable way of getting rid of such unnecessary charges is by paying off the bill before it actually gets due every month and prior to the last date. It has been found that in 1998 consumers paid an amount of USD 4.8 billion as penalties for their card payments irregularities, while in 2005 the figure shot-up to a whooping USD 12 billion which signifies the fact that more and more cardholders are not paying off their bills in the due course of time and thereby facing the unnecessary penalties invoked on their statements.

There is an important penalty which you should be aware of: for some reason if you are late for paying the credit card bill on a particular occasion, the card issuer can raise the rate of interest without any respect to fact that you could carry a good track record of making your payments before time except on a single occasion. A report generated by the institutes for Consumer Financial Education, San Diego shows that 40% of the credit card issuing companies increase their interest rates on account of late payments by card holders.

Is there a way of saving yourself from such unnecessary “hidden” costs? Well, consider the few following advices-

The day you receive your card statement for payment of the bills, try dispatching the payment on the very day. You must try to clear the minimum due every month and if possible more than that. Thus in a way you are avoiding the increasing interest rates and the late payment fees. An even better way of avoiding late payments is paying your credit card bills through online automatic payments, to be deducted from your account before the due date. Thus, there shall be no chance of you forgetting to make payments prior to the due dates.

You should do a little analysis before applying for a credit card, as you should identify the better card for you according to your spending habits and repayment capability. You should always monitor the terms and conditions of the credit cards you are holding, as they may change from to time.