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Friday, August 18, 2006

Six Credit Card Secrets No Bank Wants You To Know



We all get them from time to time. You know, the sealed envelope in the mail that have a written message such as "You've Been Pre-Approved For A New Credit Card From..." If you are like me, you file them away- usually in the trashcan or shredder! Throughout many years of receiving those offers however, I've noticed many loopholes that anyone can use to their advantage. Weather you already have credit cards or still receiving new offers the following six secrets are what I learned to follow. Don't worry, they're easy methods anybody can do! This way you can lower how many credit cards you carry to one or two.

WHAT TO DO

1. Interest Backdating

THE PROBLEM: The majority of credit card issuers charge interest starting from the day a charge is posted to your account if you don't pay in full monthly. However you're being charged interest starting from the date of purchase before you've even paid the store!

THE SOLUTION: Look for another card issuer, or better yet, pay your bill in full by the due date.

2. Two-Cycle Billing

THE PROBLEM: Issuers who use this popular method of calculating interest charge two months worth of interest for the first month if you fail to pay off your total balance in full. It's affecting you whenever you switch from paying in full to continuously carrying a balance.

THE SOLUTION: You can either switch issuers or continue to pay your balance in full each month.

3. The Right To Setoff

THE PROBLEM: You have money on deposit at a bank. Plus your credit card is issued there. You signed an agreement when you opened the deposit account and it permits the bank to take those funds if you become delinquent on your credit card.

THE SOLUTION: You can either bank at a separate institution or avoid delinquencies.

4. Fees Are Negotiable

THE PROBLEM: You're paying up to $50 a year or more as an annual fee on your credit card. You also are subject to finance charges of over 18%.

THE SOLUTION: If you're a customer who normally pays on time, most banks are willing to reduce or drop the annual fee. Plus reduce the interest rate but only if you ask! Otherwise, you can switch to a lower- priced card.

5. Interest Rate Hikes Are Retroactive

THE PROBLEM: You signed up for a credit card with a low introductory rate, such as 1.9%, for six months to a year. After your time is up, your existing balance is subject to the regular or sometimes even higher interest rate.

THE SOLUTION: You can either pay your balance in full before the rate increase or close the account.

6. Shortened Due Dates

THE PROBLEM: Your initial offer included a 25-day grace period in which to pay for new purchases without incurring finance charges. However the bank have shortened the grace period to 20 days.

THE SOLUTION: Ask to go back to 25 days. You can do so by writing your bank explaining why you would rather stay at the preferred 25-day grace period. If you're refused, then switch to a different credit card issuer.

These techniques have worked for me time and time again, and I'm sure they will for you too. I've used them consistently to lower the quantity of cards I carry to now two. If you follow these proven techniques this way, not only will you lower your chances of falling into debt, your monthly bill payments will be a lot easier and simple.

ABOUT THE AUTHOR

Cornelus Postell has been in the financial industry for several years and has worked exclusively for several major firms. Cornelus is also the author of "Money Solutions That Works!" You can check out his book at http://www.solutionswerks.com/. Don't forget to sign up for his free training program filled with uncovered hidden ways to gain financial freedom.

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