Most people think they’re getting treated pretty well when it comes to their financial institution, but looks can be very deceiving. Banks these days are offering low rates, no annual fee and of course reward points for joining. But you will see that the grass is not always greener on the other side.

Most of these perks will eventually get you into higher rates in the long run. It’s hard to avoid the tricks that will pull you in, but it can be done. Most of the time when you decide to get one of these so-called low-interest rate credit cards the only thing it applies to is transfers, not actual purchases. Most of the time, in this case, you will end up having your higher debt rate grow to extremes. Do not forget about those late payments, these could boost your rate even higher. First and foremost take the card transferred to and lock it up safe and do not use it. Read the fine print to make sure you are getting what you want.

Even if you have done it only once the trail of making a late payment can be severe. Hikes in interest rates due to paying your payment late are something that banks pray on. Another thing that can be bad when it comes to banks is that they usually practice a policy called universal default. This basically means if you are late on a payment to another company or you have made a large amount of inquiries on your credit file the bank will hike up your interest rate even though you have not defaulted on there loan.

Unfortunately, the credit card companies are not required to tell you in advance about the hike in your rate. You might want to reconsider the card if your institution participates in universal default. Some of the companies will offer you a two-week notice so you can pay of your balance with a lower rate. The only catch is the account will close which prevents you from making any more purchases. You can also tell the Card Company that you have had other offers from other companies. You will see that most of them will come down even if it is just a little.

You might also want to keep a zero balance on the card so that you will not be charged by your average daily balance. This can prove to be a lot if you have a card that caries a two-cycle billing system. Check with your company to see if they bill like this. If you carry a balance a lot you might want to switch to a company that has a single one. Lastly, make sure that your overdraft protection is linked to savings so you can avoid the fees the bank charges for a bounced check.

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