Credit Card 101: What The Fine Print Really Means!by Sandra Bostwick, PassPorter Guest Contributor
Last modified 12/6/2007
There’s more to charging a Disney resort or cruise vacation than choosing between umbrella drinks on your private balcony or a juice box at the food court. Your PassPorter can help you with those details, but if you are using a credit card, you need to beware of the lending villains and their sneaky lending terms, hidden fees and bait-and-switch interest charges.
With all the attention on predatory mortgage lending and the sub-prime mortgage disaster, credit cards may be the next likely place for lending villains to lure unsuspecting borrowers! The bottom line is that credit cards make their money in late fees, cash advance fees, balance transfer fees, and interest. That sounds fair enough, as long as everyone is honest, right? Well, even if the fine print is visible to the naked eye, what does it mean?
Here are some communication basics to start with. Ask lots of questions and don’t stop until you understand. Write down the name of whom you spoke with, the date and time of the call, and take careful, legible, notes. If the representative speaks too quickly, say you are writing and ask them to repeat or speak more slowly. If you feel that someone is reading a script, be careful! Many scripts are unclear and can be misinterpreted in ways that will cost you.
Have an accountant or financially gifted person review your terms. Of course, since credit cards CAN say “We’ve changed our minds and it will probably cost you” at any time, you should never run up charges that you couldn’t pay off with back-up cash sitting in an interest bearing account JUST IN CASE!
The good news is that The Fed is looking into changes that may protect us all from sudden rate changes, tricky wording, and evil credit card tricks in the future. The bad news is, until that happens, you should understand these tips. You are probably thinking that this sounds like as much fun as a time-share salesman’s presentation when all you wanted was the free vacation, but try to stick with it! Here are some tips to help you navigate the murky waters of the credit card seas:
- Your February statement does not show interest, since the previous balance was 0.
- You send $200 payment on time for February payment, but leave a balance.
- March statement surprises you with two months of interest charges back to January 2nd!
- You pay down to 0 immediately and cut up your card.
- Your April statement comes and STILL charges interest on the average balance of the previous two months.
- You pay that interest to 0 and, with a second month with no balance, you are finally free at a cost of about $200 if your interest rate was 12% and you made no other charges. If your rate is 24%, the cost goes up big time for the benefit of delaying payment for a short time.
If you’ve made it this far, pat yourself on the back. You’ve earned a few extra treats for your vacation. The best news is that Disney has plenty of options to suit most budgets and smart planning should get you your key to the kingdom and plenty of magical surprises. Say hello to Mickey for me!
About the Author: Sandra Bostwick is an occupational therapist, music therapist, and adjunct professor at County College of Morris. She owns Creative Learning Studios and enjoys motivational speaking and writing. She has experience in the travel and entertainment industry on land and sea, but dreams of earning a Walt Disney World cast member pin one day. She is an expert peer reviewer for the PassPorter Guides and can be reached at Speed_of_light_2@yahoo.com.
Special thanks to Larry Bostwick, a financial wizard who looked over this article and did the math.
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Updated 12/6/2007 - Article #204
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