Many posters are talking about jacked interest rates on CC's. My hsuband said that CNN was talking about a new CC law passed. On my cards I got new agreements as well. If you are late more than twice in a 12 mo. period, they jack you to the high default interest rate on your CC. Isn't that INSANE? I mean, not that we shouldn't pay them on time, but if we had a bad couple months, 24% or whatever the case may be! I think this is such a crock of crap.
"If you are late more than twice in a 12 mo. period, they jack you to the high default interest rate on your CC." This has been common for some time. What did change recently were requirements, I think by Federal OCC, that CC debt minimum payments be sufficient to actually pay down a balance in a reasonable time. Prior to that change, some companies had minimum payments that were so low it might take 30 years to pay off a balance, particularly for accounts with higher interest rates where most of the payment went to interest or fees.
Ontrack, All of my cards sent recent ammendments to their agreement and made a POINT to alert me of the two time late penalty clause. I just looked at my previous agreements and that clause was not in their before. But thank you for clarifying the new law. I suppose we should pay more down on our balances anyway.
What many if not all CC companies have sneaked into those credit agreements now is a Universal Default clause which allows them to jack up your % if you are late on any CC or with any creditor even if you are never late with them!?! Isn't that sick!! That's why DH and I have lived on cash for the last 4 years and intend to keep it that way.
It's been that way for years (being late with another creditor can jack your rate). In fact, several years ago Bank of America changed their terms so that the default rate was only charged if you were late with them. That was the exception rather than the rule. Living on cash is good for some things, but when you want a car loan or a mortgage you won't be able to get it without credit. The best way to do it is to use a credit card for things you'd pay cash for, set the cash aside, and pay the bill when it comes. You won't have to worry about an interest rate and you'll build your credit. Pay for something like an airline rewards card and get some free tickets as well. I paid $80 a year for a mileage card and could get a free ticket in two years or less by running my normal expenses through it. So you could consider that $160 for a ticket to anywhere in the US.
I agree with you Hedwig and I agree that cash is best for a lot of things too. I think it all depends on how disciplined we are. And, as we have learned on this site....we are ALL at different levels in that department. The airline miles is a great idea though. I have wanted to do that for some time now. However, I won't until pay off my other CC balances! Trying to stay disciplined!!!
If you are not in the financial position to be able to benefit from airline miles, the air miles might not offset the higher rates and fees.
