We have all experienced unpleasant surprises when using our debit cards. From fees being charged by both our banks and ATM machines on one withdrawl, to unforseen penalties for overdrafts, there are many reasons why the world needs a step-by-step guide to the best use of these complex instruments.
The incredibly helpful site LifeHacker has created just that. Writer Adam Dachis expains: "Debit cards come with more risk than most payment methods, but we tend to use them because they're convenient. While they can be handy, they can also cause you a lot of trouble. Here's how to stay safe." Greater financial safety through understanding debit cards, something most of us use daily, is critical as our economy continues to flounder.
Punishing You for Being Smart
These fees are the lowest of the low because they penalize you for being a responsible credit card user. Some of the biggest offenders include charging you a fee for:
+ Closing your account
+ Failing to use a card for a period of time (such as six months or a year)
+ Not carrying a balance
+ Every transaction each and every time that you use your card
If your card charges you any of these fees, it's time to look for a new card!
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Dirty Credit Card Tricks
Say "Bye-Bye" to Your Grace Period
No grace period means that you'll start accruing interest the moment you charge something and that can cost you a bundle of "extra" interest. Most credit card issuers have already reduced their grace period from 25 days to 20 days. Many others have eliminated the grace period altogether. Now they are coming up with more and more reasons to take away your grace period. Miss a payment? Stop carrying a balance? Bye-bye grace period!
Punishing You for Being Smart
These fees are the lowest of the low because they penalize you for being a responsible credit card user. Some of the biggest offenders include charging you a fee for:
+ Closing your account
+ Failing to use a card for a period of time (such as six months or a year)
+ Not carrying a balance
+ Every transaction each and every time that you use your card
If your card charges you any of these fees, it's time to look for a new card!
Lowering Your Minimum Payment
Another way some cards try to jack up their profits and lure you deeper into debt is by lowering the minimum payment due on your balance. It used to be cards required a minimum monthly payment of about 4% of your balance, but many now require as little at 2%. Don't fall for it! Going from a $40 payment to a $25 payment on a $2,500 balance means it will take you an extra 19 months to pay off your balance!
Inviting You to Skip a Payment
Broke this month? In their infinite generosity (ha!), some cards will "invite" you to skip a payment. This "helpful" offer, which sounds great at first blush, often comes after the holidays when your balance is big and your wallet is stretched. DON'T DO IT! Skipping that payment can lead to a host of trouble from a higher interest rate to possibly having to make extra payments in the future. Are you starting to notice a pattern?! You should be skeptical whenever your credit card company does something "nice" for you without you asking for it!
Tricky Timing
We all know that our payment is due on a certain date or it's late, right? But a new twist being thrown into the mix is having your payment due by a certain time on the due date. If your payment is due at noon, and gets processed at 12:01, you get socked with a late fee AND likely a higher interest rate. Gimme a break! Carefully check your statement so you avoid this trap.
