Cardholder Beware

With this increased choice in credit cards comes increased consumer responsibility. In many cases, there's no law stopping an issuer from charging you a super-high interest rate or an interest rate higher than you deserve.

The only person who can insure that you get a good card rate is you. The best advice is to build a strong payment history and keep your credit as clean as possible.

"The main thing is to keep your nose extremely clean no matter what," says Linda Sherry, editorial director at Consumer Action, a consumer advocacy organization based in San Francisco, Calif. "Avoid late payments."

You can bet a credit card issuer will up your interest rate if they see something on your credit report they don't like. Don't give them a reason. Pay your credit and other bills on time, every month. Here are some tips on avoiding credit card late fees:
Follow payment guidelines as outlined by the issuer on the back of each credit card bill.

Use the preprinted envelope provided by the credit card company.

Include the billing coupon, and be sure to write the amount being paid in the box provided.

Make sure checks are legible and the payment amount is correct.

Sign the check. Write the credit card account number on the check.

Send payment with proper postage at least one week in advance of the due date to the payment address requested by the issuer.

Consider online bill paying. Issuers, including Discover, American Express and First USA, accept online payments.

If the due date is looming, consider sending the payment by express mail or wiring the payment with Western Union. These express services may prove cheaper than paying a late fee.
Let's say your credit record has improved since you applied for your card. There's a good chance you qualify for a lower rate. But no card issuer in the world is going to knock down your rate unless you ask. So call and ask. Have other lower rate credit card offers in hand when you call.
If your issuer won't lower your rate, transfer your balance to a lower rate card.

As an informed and intelligent consumer, you must read the terms and condition of the credit card offer and read the disclosure in its entirety. These are the rules set forth from the issuing bank that you will be playing by so you do need to know what your new credit card is all about. Beware of terms like “universal default” which will allow this credit card to increase their interest rate if you go past due on any other account that you hold. There are many traps that are within the realm of the disclosure that an unsuspecting consumer should be aware of. Read it word for word and do not agree to the terms unless you are one hundred percent sure that you know what the full deal really is.

There are literally thousands of credit card offers available to consumers with interest rates ranging from the 0% A.P.R. (annual percentage rate) which is normally an introductory rate, and as high as 18 to 23 percent for high risk consumers. It is up to the consumer to educate themselves as to how the card works and what fees are involved. Ignorance is not an excuse for not knowing about the terms.

It is all spelled out for you in the disclosure, which no one really reads, and that’s how people get into trouble with their credit cards.