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Banish credit card debts

Do you harbor a love-hate relationshipdue date, you'll still be liable for the
with your credit card?interest that accumulated since the time
There are lots of reasons to love ayour billing cycle ended.
credit card, starting with the* Different interest rates. Expect
convenience and financial tracking thatdifferent -- and changing -- interest
accompanies paying with plastic. Don'trates depending on whether you're making
forget the perks, like cash and airlinepurchases, asking for a cash advance, or
miles, which could help make yourtransferring a balance.
fantasies of a Hawaiian vacation a* Penalty rates. Expect your interest
reality. But there are also plenty ofrates to go up if you pay late or exceed
reasons to feel less than enamored withyour credit balance, in addition to
that little piece of plastic.paying a late fee. Also, expect that
Credit card practices have become a hotthese penalty rates may apply to your
topic on Capitol Hill, and lawmakersoutstanding balance, even if you charged
this week tried to shine a bright lightthose purchases when your interest rate
on some of the policies they don't like.was much lower.
A panel of senators called in executivesTeaser rates. Although the initial
from Citibank (NYSE: C), Bank of Americainterest rate charged by a new card
(NYSE: BAC), and JPMorgan Chase (NYSE:might sound great, it might not last for
JPM) to explain some of their practices.long. Often, an introductory rate
Two of those companies, Citibank andapplies for only a short time, or only
Chase, had recently announced someto a transferred balance. Make a monthly
consumer-friendly changes. Nevertheless,payment even a day or two late, and your
the lawmakers had a raft of complaintsteaser could go away faster than you can
about the industry in general, whichsay "Charge it."
make for a good reminder why carrying* Payment allocation. Send a check to
credit card debt can get very expensive,your credit card company, and odds are
very fast:that your low-interest balance will get
* Disappearing grace periods. If you payprecedence over any higher-interest
your balance every month, you have apurchases. Your higher-interest balance
short time before interest will bewill hang out there, accumulating
charged on your new purchases. Not so iffinance charges, while you work through
you're carrying credit card debt monththe lower-interest balances.
to month. In that case, new purchases* Credit card fees. Expect to pay a fee
almost always start racking up interestif you exceed your credit limit, even if
costs immediately.the credit card issuer approved the
* Double billing. If your credit cardtransaction. Also, expect to pay a fee
uses double or two-cycle billing toif you think a mailed check won't get
figure the balance subject to financethere in time, and you want to pay by
charges, be prepared to pay more. Whentelephone instead
using double billing, the credit card* Fees added to your balance. As the
will use the two prior months' worth offees pile on, they'll be added to your
charges to determine your balance,monthly balance, and they may accumulate
whether or not you carried a balance theinterest just like your outstanding
month before.debt.
* Trailing interest. This is interest* Confusing disclosures. Try reading
that accrues while your check's in theyour card agreement one day. You may not
mail. Mail a check to your credit cardknow what the agreement's talking about,
to pay off a balance and, even if itbut you'll definitely know what those
gets to the credit card company by thesenators were talking about.



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