CreditShack.org

The list of tricks credit card companies use to wring extra money out of you continues to grow. Although interest rates are near all-time lows, credit issuers stuff hidden fees and rate hikes into the fine print of card agreements.

One such trick is the default rate. Any time you break the rules, the credit card company reserves the right to jack up your interest rate sky-high. The so-called default rate may run as high as 30%. Paying down your debt is a real challenge when you’re being charged 30% interest! The default rate is commonly triggered by either making a late payment or exceeding the credit limit. The exact causes vary from card to card, and are specified in your card’s terms and conditions.

To make matters worse, some credit cards will subject you to the default rate if you make a late payment to any of your creditors. Credit card companies periodically check your credit report for late payments. If you are late paying anyone, your interest rates for all your credit card accounts could drastically increase.

Late payments are not always your fault. Checks can get lost in the mail. Some credit cards try to trick you into making late payments by setting their payment due dates on weekends or holidays. Others change the payment mailing address frequently to further delay your payments. With the credit card companies itching for you to make a mistake, you should be on your guard.

You can insulate yourself from late payment penalties by making your credit card payments online. Most credit cards offer the ability to make payments securely online for free. Online credit card payment services allow you to electronically transfer funds from your checking account online. When you pay online, you can be confident that your payment will be credited when it’s supposed to. We recommend that you schedule your online card payments at least three to five business days in advance of the due date, just to be on the safe side.