Paying with a credit card is definitely handy – just be sure you don’t pay an unnecessary price for the convenience.  By that I mean, don’t let credit card fees get out of control. 

There are ways that this can happen without you easily knowing of it.

First and foremost are late fees.  They can be exorbitant!  Miss a payment due date and you can get hit with a penalty ranging from $15-$39. 

Not only is this all-important due date not always crystal clear but credit card companies have the right to change this due date deadline with very little notice.  In fact, they can even specify an exact time of day that your payment is due!

And since a late fee increases the balance you’re carrying, if you’re at or near your spending limit, this fee could push you over the limit which could then result in an over-the-limit charge of another $15-$39.

Another potential way your credit card fees can get out of control:  if you’re late with a payment or go over your spending limit. 

If either of these situations happen, the credit card company can increase your annual percentage rate of interest (APR) into double digits.  Many credit card companies will do this even if you’re late on any of your bills – even those not charged to that particular card.  This is a tough but good lesson in reminding us how inter-connected credit history is and the potential consequences of any credit delinquencies.

So what to do if you are hit with a late fee or over-the-limit fee? 

• Contact the credit card company.  Ask them to wave the charge for you as a one time courtesy.  Some will.
• Request a lower APR and if the company says “no” consider transferring to another credit card company offering a lower rate.

If you do consider switching to another credit card company – one caveat:  if you have a long-standing history with that credit card issuer, closing that account could hurt your credit score. 

So I suggest that you keep the credit card with which you have the longest credit history – even if the APR is a bit steep.  Use it just a couple of times a year so there’s activity on it but only charging what you can pay off in full when the bill comes due.  However, shop for a credit card that has a low rate and use that one consistently and responsibly.

Plastic protocols are important to know and knowing them keeps your credit – worthy.

Here’s to your health and wealth.

TAGS: APR, credit card fees, credit cards, late fees, over-the-limit fees, payment due date

Knowing the score – my credit score that is – has always been important to me.  It was one of the silver linings I found many years ago in the dark cloud of post divorce in a community property state.  Having been a young married woman in the early 70s, my idea of good money habits was:  “What’s mine is his.  What’s his is mine.  And we and our money would live happily ever after.”

Boy did I get a reality wake up call.  When I initiated divorce proceedings nearly 18 years later – figuring out the mine and the his of our money – came down to attitude.  As the obvious breadwinner (a calculation reached by an angry female judge who was herself the product of a divorced family and still dealing with her own issues of abandonment) – I got nailed.  I was to be responsible for paying all the outstanding bills, providing all the education expenses for my children and writing the checks for any other family matters yet to be named or known.

I had two choices:  I could get mad or I could get even.  I chose the latter – and I don’t mean getting even by retaliation.  Even though my ex said he didn’t care about the bills or lines of credit in our name and would do nothing to pay them off – I did.  I cared very much.  In fact, I cared so much about what creditors would say about my name that I set my sites, goals and checkbook on paying off all the family debt.  Month by month.  Chunk by chunk.  And when that I was done, I regaled in the satisfaction of never having to see his name and mine together on any bill or document that represented my new life. 

It took a few years of deliberate, consistent, always on time payments.  But finally I was at a place where I understood the importance of and the need to know the score – my very own, just me, individual, earned it myself, pristine credit score.  There is big bold numbers was my answer:  793.   I love the number.  I guard the number.  I’ve kept it there even though I’ve had to handle my share of disappointments in this crazy money time called a recession.

The new (I)deal when it comes to credit worthiness isn’t about how much money you have, it’s about how you handle what you have.