Information is power is an old adage we have all heard before, but in this time of mass media and the internet, the right information can truly empower an individual. Nothing more evident of this is the information big business hides from the average consumer. Knowing certain things only a privileged few who are in the credit industry know can save you thousands of dollars. Have you ever heard of "Universal Default" or "Interest Backdating"? Probably not, let us explore these and other little known secrets of the credit card industry.
Did you know that if you fall behind with one creditor/account, that other creditors will know about it and penalize you by raising their interest rate or minimum payment? This is referred to as Universal Default. Creditors will pull credit reports throughout the life of an account to review various things like, to see if the consumer qualifies for other products or to see if the consumer has become a greater risk. Most creditors will do this about 2 times a year and according to their contracts with you when you applied for the credit can raise the interest rates or change other terms at their discretion. To protect against this you need to pay attention to your monthly statement and read the fine print.
Did you know that some credit cards will charge you interest from the day of the purchase, even though they don't pay the merchant until several days later? Interest backdating is not that common anymore, especially with larger creditors or those who specialize with customers with good credit. The only way to know for sure if your creditors practice this, is to read the fine print and often the only way to avoid this if they do, is to pay off your monthly balance in full.
Did you know that some sub-prime credit cards will charge you to pay your bill online or over the phone? They are supposed to disclose the fee prior to processing it, so if you have been hit with the fee, you probably want to send it by mail in the future. We pay credit card companies enough without the nickel and dime routine they play with fees.
Did you know that the time of month your creditors report your status to the bureaus can affect your credit score? If your creditor sends their information to the bureaus the same day they mail your statement, your debt will report larger because you have yet to make the payment for that month yet. Your FICO score is dependant on several factors, one of which is your total debt compared to your available credit, so if your debt is higher (because you haven't made a payment yet) your score is calculated lower, even if you pay your payments on time. The only way to avoid this is if your creditor reports later on in the month after they have received your payment or if you make your payments before they report (before you receive your statement).
Did you know if you are in good standing with your creditors and have a good history of paying on time you can lower your interest rates? The credit card industry is very competitive, with all the low introductory rates and balance transfer incentives out there, a credit card company would rather keep a customer happy then have to spend to go find new ones. Use this to your advantage and call them and say you are considering doing a balance transfer to a different creditor and want to know your balance. They'll probably transfer you to a different person who will do their best to keep your business. This includes lowering your interest rates, etc. Remember, you have to be in good standing to utilize this negotiation tool.
Did you know if you have a bank account with a creditor that you also have a credit card with, they may access the bank account to retrieve payment on the credit card? This is allowed by your permission on something you may have signed; the documentation refers to this as "Right to Setoff". Most people don't read the fine print and realize this. To avoid this you need to keep your accounts with different institutions.
Did you know you are paying twice the fees on cash advances? Most credit card companies enforce both transaction and finance fees for cash advances. Don't take out cash advances, it's a bad idea and there is no way around the fees.
Hopefully with this knowledge you can add some size to your wallet, but if you still need help with your debts you may consider working with a professional debt relief company like [http://www.Negotiatemydebt.com] who has insiders that can give you consultation on your debt and ways to get rid of it. Credit is a privileged resource, not a right; but anyone can become privileged with the right information and help.
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