Consumers Advised to Study Credit Card Costs

   

Posted: Jul 20, 2009

Consumer credit experts are offering various tips to help people save money at a time when many card companies are expected to raise fees and impose other costs on account holders.

For consumers, it's more important than ever to be on guard against abrupt interest-rate hikes and high late fees, because credit card companies have less than a year before federal reforms will force them to find other methods to pad their profit margins.

A report by Money magazine offers some insight into holding down the cost of having a consumer credit card in the current financial environment — which is especially important because, the article notes, large credit companies are expected to lose as much as $82 billion between now and next year, due to the recession.

Among the tips offered in the Money report are to avoid keeping any particular cards idle for too long, since this will make it more likely that a lender will reduce the limit on that card or cancel it outright, damaging the card holder's credit score in the process.

Consumers are also advised to keep balances low on credit cards to further reduce the chance of reduced credit scores and interest rate hikes. They should also be aware of payment due dates, because some banks have been trying to squeeze more money out of consumers by charging late fees amid narrower grace periods than ever.

Elsewhere, a USA Today report warns consumers that banks are also trying to squeeze more money from consumers in the current environment by charging higher fees than ever for debit card overdrafts.