How to Solve Your Credit Card Problems
If you have credit cards, you could have a number of problems. These can cause you to pay more in fees and interest rates and subject you to unfavorable terms and conditions such as a universal default clause, a mandatory arbitration agreement and a default rate. When you do away with credit card problems, you are making the most cost-efficient choices.
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Instructions
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Find out what problems you are facing with your credit cards. Look over your terms and agreements as well as your statement to find out what you are up against. Examples are excessive fees, high rates of interest, large balances, late payments, late fees, and variable rates. Make a list of what's affecting you.
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Determine which problems you can correct. If you have a high interest rate, call another credit card company, perform a balance transfer and receive a low promotional or introductory rate. Find out if the standard rate, which kicks in after the promotional rate, will be lower than your current rate. Perhaps you have a large balance that needs to be paid off. If you have the cash in the bank, issue a check for the balance.
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Call the credit card company for help. If you have fees for going over your limit, late fees, cash advances, or an annual fee, the bank may be able to waive one or more. Some banks will waive fees as a one-time courtesy if you haven't had fees waived recently.
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Ask for a credit limit increase. Banks have been lowering credit limits as a way to limit losses. When a limit is lowered, your credit score may be lowered, which can lead to higher finance charges when you apply for other credit cards. Ask your credit card company to increase your credit limit to raise your credit score.
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Wait for the new changes with credit card laws. Laws taking effect in 2010 are designed to help consumers receive more favorable terms and conditions.
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Tips & Warnings
A universal default clause says if you have a credit card with ABC company, it can raise your interest rate if you are late with XYZ company even though you pay ABC on time.
Review your terms and agreements. This may help you avoid and eliminate some credit card problems.
Watch out for mandatory arbitration agreements. This agreement says that if you have a dispute with a credit card company, you waive your right to have your case heard in court. The case is heard by a third-party arbitrator and the decision is binding.
Be aware of a default rate. When you are late with a payment, your current interest rate is canceled, and a default rate is activated, which can be as high as 29.9 percent.
