I was watching TV a while back when I saw a commercial for a bank card that basically said that if you pay your credit card bill late, you won't be charged a late fee as long as you've made a purchase with the card during the billing period.
What a deal! Just use your card once a month and you don't have to worry about paying the bill on time!
Well, not exactly. You see, with most credit cards these days, when you pay late, two things normally happen. First, you're charged a late fee that can typically run from $15 to $35. But you can also have your card's interest rate hiked to the issuer's "default" or "penalty" rate....and in this particular instance, according to information on the card issuer's website, this rate is 30.74%! The info doesn't specify how many times you have to pay late before this kicks in, but often it's as little as once or twice during a six-month period.
No wonder this company wants you to "not worry" about paying late! 30.74% is a juicy return on investment for them....and to make this even more fun, they state that this rate may apply "if you default on any Card Agreement that you have with us." (The italics are mine.)
They can also hike the rate if you pay late to any creditor!
When you get a credit card, whether at the bank or by responding to a mail offer, forget about the large headline hype. Check the fine print, especially that contained in the here-you-gotta-tell-the-truth "grid." And don't trust credit card issuers to have your best interests at heart.....the interest they really care about is the interest they can make you pay.
(Note: Since I first wrote this piece, I notice that the commercial in question seems to have disappeared from TV. Could it be that someone pointed out to the upper management of the bank involved that this particular marketing ploy was just a bit too far to the wrong side of sneaky? I hope so.)
No comments:
Post a Comment