By Beth Pardue |
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The vast majority of credit card offers you receive are fair and
ethical. But there are two things to look out for that some
credit card companies have been known to pull on unwary
customers. These tactics are perfectly legal, so your only
recourse to preventing them is to be alert.
The old bait
and switch. You apply for a great
credit card that gives you tons of frequent-flier miles,
hoping to put all of your shopping on it, and then head to the
Bahamas in February. When and if you get that card, study the
terms carefully. If you don't qualify for the great card, the
credit card company can send you a completely different card
with different terms--without telling you.
Cash advance
fees and rates. Read the fine print on your statement and you'll
see it's a very bad idea to take cash out on your credit card.
Your card might have a really low rate for purchases, but the
rate for cash advances is much higher. And there is no grace
period--you start paying interest right away.
Aside from
paying a high rate on the cash you take out, you're going to pay
a fee, usually 2 percent to 4 percent of the amount advanced.
And your payments will be applied to the lower-interest balance
before they are applied to your cash advance. Don't get yourself
into trouble with either of these two mistakes ... read the
terms of your credit card offers carefully before you activate
them.
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