Why You Might Be Paying Too Much Interest on Your Credit Cards
it's not hard to compare interest rates on credit cards. Companies make the basic interest rate obvious on their applications. It seems simple enough; you just pick the company that offers the lowest interest rate. However, it's just as important to read and understand the fine print. Some people pay too much interest on their credit cards every month because they don't know what interest rate they’re being charged. Here are some common examples of why you may be paying too much interest on your credit cards:
You Take Out Cash Advances
Most companies charge a different interest rate on cash advances than on regular purchases. Your interest rate for normal purchases may be 15%, but your interest rate for cash advances could be as high as 29.9%. Trips to the ATM should not be funded with a credit card.
you've Missed Payments on Your Other Credit Accounts
Some companies have a clause buried in the fine print that says your interest rate can be raised if you make late payments on any credit account, not just the account you have with that company. If you become delinquent on any of your credit accounts, you could face an interest rate hike on your credit card.
Your Interest Rate Changes With Your Balance
You might have a $1000 limit on your credit card, but that doesn't necessarily mean you are charged the basic interest rate for all balances up to that limit. Some cards charge a low interest rate for lower balances, and a high interest rate for higher balances.
Your monthly statement should clearly state all interests rates you are being charged. If you believe there is a discrepancy, follow up with your credit card company.
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