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Credit Card Fees You Need To Watch Out For

Imagine the kind of excitement you felt the first time you pulled out your first credit card out of mailing envelope. You can't deny the fact that it makes you feel like rushing to the shopping district and get hold of that expensive shoes sold on the window. In reality credit cards help you buy something that you cannot afford with your paycheck alone, it makes you feel like saving some bucks and getting the things you are longing to have, well you're wrong!

Fact is banks profit the most out of credit card fees and other hidden charges thrown out to you. As a wise consumer you have to know the credit card fees you need to watch out for. Those cards were not issued to you just to help you in any way, they were given away as part of their business ventures and we say business it means profit. Because of the large competition among banks, credit card fees like annual fee have been waived in order for it to be more attractive. You need to watch out for other credit card fees that may have been hidden to replace the lost revenue derived from annual fees.

In 2009, US President Obama signed a new Credit Card act called CARD or (Credit card Accountability, Responsibility and Disclosure). The initiative is to protect consumers from over charged credit card fees and creating a worry-free card swiping environment for all. Having that act as a shield for credit card users you still cannot be too confident and never let your guards down. This act cuts down bank revenues because of reduced credit card usage so you need to watch out for new fees and higher interest rates. Banks would also reduce their reward programs or impose new fees like processing fee for collecting rewards or reward balance checking. You have to analyze those things first before signing up.

As the new act impacts bank revenues, you can expect for new kind of credit card fees that may be imposed to their users. After the new Act were signed, people are facing trouble with over limit fees charged to them, but when the new law were passed and implemented the banks felt that they need cover the losses by means of new charges. If you would look into your credit card statement you would see a few percentages of new charges and if you would see further, you would realize that your interest rate went up.

After the new law was enforced, some credit card interest rates went up between 19 to 20% and you need to watch out for that. Another thing you should remember as a cardholder is the difference between grace period and payment due date. Due date is when you need to make payment to avoid overdue charges, whereas grace period is when the interest rate would be applied. You need to be more careful in using that plastic to avoid credit card fees and charges.

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