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2008-07-28 05:01:45

Credit Card Company Losses Result in Tighter Credit Terms

When selecting a credit card, people pay close attention to interest rates, but somehow they underestimate other credit features. Now that credit card industry has hard times, it's more important than ever before to read the terms and conditions of your credit contract.

Increasingly, credit card companies suffer great losses. The American Bankers Association reports that credit card delinquencies are on the rise, they rose to 4.51% during the first quarter this year. And lenders adjust their credit offers, i.e. cut credit limits and raise interest rates. With soaring food and fuel prices, it may be so easy to fall behind with your credit payments. Read more and learn how to avoid troubles with your credit payments.

Low-rate credit cards are really awesome when they're new and you just start using them. The problem is, most people believe they have this low rate regardless in which way they handle the card. They don't think much about the impact of late credit payments on their credit card rates.

However, it's becoming more and more difficult to meet credit card obligations - to be on time with your payments when issuers cut grace periods on cards, to spend within your credit limit when companies shrink them.

The rationale of these actions is that companies are being squeezed for credit profits and now they try to make them up by raising credit card charges. Even if you have never been delinquent, it doesn't mean that you will not feel the sting of these credit moves.

According to the recent studies, credit interest hikes are up to 24%. And the most frustrating thing about interest hikes is that you a new rate will be applied to your current credit balance. Needless to say how it may affect your credit card matters. If you carry a balance of $1,000 on a card with some 10% rate, your rate could shoot up 30% and even more after a single late payment. The difference is really considerable. So how you can avoid such troubles?

Online credit payments can be a smart alternative for those who want to be on time. It saves you time and money. Not only you can save your money spent on stamps and checks, you can pay your credit bills whenever you need it, even late at night. In addition to that, it takes less time.

Read the fine print carefully. When choosing the card and scanning through its details, we may not notice some important information, and it may result in unexpected charges and serious financial difficulties. Make sure you completely understand terms and conditions on your card. If you don't understand some details, contact the issuer and ask your questions. Be careful when handling credit cards - try to stick with your current credit limit and read your credit statements to get control over your plastics.

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