Don't believe everything you see on television and the Internet, read in the newspaper or hear on the radio.
Many people find themselves scammed by credit card consolidation offers.
There are a few legitimate agencies that help people get their credit card debt under control, but there are also many companies out there looking for people who aren't good with money to make another mistake.
This is one of the many common credit card basics that a lot of people misunderstand.
Credit Card Basics: Interest Rates Maybe you haven't gotten yourself in debt.
You're just an average person.
What do you need to know about credit cards? Surprisingly, interest rates and the costs of credit are misunderstood by the majority of credit card users.
For example, did you know APR includes the compounded rate of interest you would pay if your money were owed for an entire year? So if you owe $1 at 10% interest, you will have paid 10 cents of interest and owe $1.
10 at the end of one year.
The biggest mistake people make with regard to interest charges is misunderstanding the compounding impact of not paying a balance in full each month.
If you owe several thousand dollars and you are only making minimum payments, your debt will go up every month even if you are no longer using your credit card.
Credit Card Basics: Payments One of the little known facts about credit cards is that it matters when you make your payments.
You probably know that being just a day late will get you a late payment mark on your credit report and a late payment fee on your credit card.
What you may not know is that you must wait until the close of each billing cycle to make your payments if you want your payments to be applied to your next bill.
If you make a payment before the billing cycle is closed, the payment will simply be added on to your previous payment for your previous billing period.
In order to have your payments applied to the correct billing period, wait for your bill to come before paying.
If you do your payments online, wait until your statement shows a minimum balance due to make your payment.
Credit Card Basics: Applying for Credit Cards If you are applying for credit cards, you need to know that one of the things that can really hurt your chances of qualifying is applying for more than one card at a time.
Each time you apply for any kind of credit, the creditor makes a credit report inquiry.
The credit reporting agency makes note of this inquiry and all future inquirers will see this inquiry.
Applying for a lot of credit at once signals a warning to credit card companies that you may be sinking in debt or that fraudulent activity is likely.
In general, you should apply for credit not more often than every four months.
Credit Card Basics: Fraud Protection Most people know that credit cards provide an extra layer of fraud protection that is unmatched.
In general, you can dispute a billing within 60 days of it appearing on your credit card payment for such reasons as fraud or errant billing.
However, many people don't realize that their errant billing disputes will fail unless they can provide documentation such as receipts, contracts, warranties, or offer sheets to back up their claims.
So you should at the very least keep all such documents for 90 days.