Beware - Cunning Credit Card Tricks

The ideal credit card customer would spend all the credit available on their card and only ever make minimum repayments, maximising the interest they owe the credit card company and making it virtually impossible to ever clear the debt. As not all customers are like this credit card providers have several tricks up their sleeves that are designed to really entice you to spend, spend, spend. Knowledge is power so read the following tips and avoid falling into the debt trap.

Late payments

Always make sure you pay your credit card bill several days before its due as most companies take a couple of days to process and clear payments so even if your repayment technically arrives on time, it may still be registered as late and you will be responsible for paying an associated penalty fee. Lenders are also likely to charge you if you exceed your credit limits and may even withdraw privileges such as 0% offers.

Cash withdrawals

Credit card companies are always keen to emphasise that you can use your credit card to withdraw money from cashpoints. This however is something you should never do. While the vast majority of purchases you make on your card are eligible for an interest free period of around 50 days (although this varies by company) you will be charged interest on your cash from the second you take it out of the ATM making it a hideously expensive way to spend, avoid doing this at all costs!

Credit card cheques

Your credit card company may have kindly sent you a book of 'convenient' cheques to use. Don't! Avoid credit card cheques like the plague, as just like cash withdrawals, interest free periods tend not to apply to this method of payment which means you'll start paying interest as soon as a cheque is cashed again costing you lots on top of the original purchase cost - not exactly ideal!

Elevated credit limit

Credit card company's often 'generously' increase your credit limit without asking in the hope that, because its available, you'll spend it. Don't fall into this trap as although it can be nice to have extra funds available try to remember that you will have to pay back what you borrow plus interest! If you find temptation too much to resist, why not try calling your card company and asking them to reduce the limit available.

Spending abroad

Before you jet off on your holidays take at your credit card company's practices for spending abroad - its likely to shock! Most card companies charge extortionate fees for foreign purchases, placing a loading or charge on the amount you spend or withdraw. Researching your options and taking out a holiday friendly card before you go will leave you with lots of extra pennies to spend in duty free on the way home!