Dodge ball is a popular playground activity. At a young age, we learn to watch the player with the ball. There is a competitive skill in watching the thrower select a target, take aim, and throw. The good players know when the ball is coming their way and step away as quickly as they can. The players who get hit with the ball, (you know the ones who are always out first in the game), either don’t pay attention to the ball, lose focus in the high-speed game or simply don’t care if they sit on the sidelines for the rest of the recess. Dodging credit card mishaps sees some of the same players. There are those with a skill who anticipate trouble dodge it before it happens. Then some lose focus or don’t understand the rules of the game. Your personal finances are not a game.
It Takes Practice To Dodge Credit Card Debt Troubles
It takes knowledge and practice to dodge credit card debt troubles. This post will bring four different avoidable mishaps that credit card companies throw at consumers. It’s a game of dodge ball, and you don’t want to get hit with the added expense. It hurts.
Not all balls are thrown straight on. The curveballs are the trickiest. These are the ones you don’t see coming your way until the last moment. Jump quickly to avoid them. Credit card companies are well-practiced with the curve. Customers don’t see it coming, so they relax and lose focus.
1. Minimum Payments
Watch out for minimum payments. Everyone wants in on this part of the game. Credit card payments are easy, but trouble lurks ahead.
Did you fall into the comfort zone? You may think that paying minimum payments every month will keep you from being hit with bad debt problems. Interest payments make up the majority of your minimum payment. There is only a small percentage of your payment going towards the balance. Read each credit card statement as there is not one set number that companies follow. Figure it out yourself. Take the minimum payment for that month and subtract the finance charge. The difference goes towards your balance. It takes several years to pay off a balance. The credit card company did not smack you with high charges. It allowed you to relax and not struggle over the payment for several years. This is a debt trap worth dodging.
2. Late payment fees
Late payment fees are worth dodging. Most creditors have done away with grace periods. Your payment is due on a certain date, miss it, and the late fee appears. Weekend due dates will not buy you time either. Ask your creditor how they handle weekend due dates. Some creditors will have weekend hours to process phone payments. Don’t think you have it covered; timing is everything.
3. Introductory rates
Introductory rates have an advantage. It’s like a ‘heads up’ notice in the game. You know when the ball is coming and can rest comfortably in the meantime. Introductory rates do expire. You can’t sit back and watch the others in the meantime. Use this time to pay off your debt before more significant rates take over. All balances will carry over to the new rate. Most creditors will add accrued interest onto your balance if you are not able to pay the debt off on time. That’s a hard hit.
4. Cash advances
Cash advances are charged much higher interest rates. Because this money comes from a creditor rather than one of the other alternative cash advance loan companies, people view this transaction as safe. Be aware that the interest charge begins as soon as you receive the funds. By the time your next statement comes, your finance charges have already increased. Therefore, your minimum payment has as well. You have to prepare yourself for any cash advance charge. ATM fees get tacked onto the balance