6 On Your Side Answers: When shouldn’t I use my credit card?

KNOXVILLE (WATE) – Credit cards are certainly convenient, but there are too many opportunities for people to use their cards in ways that make it so they can’t pay them off.

Betty in Jacksboro asks: “Are there situations where you shouldn’t use your credit card?”

Congress passed a law in 2009 that gives those of us who carry a credit card legal protection from unfair practices. It’s called the Credit Card Accountability, Responsibility and Disclosure Act of 2009.

For example, a credit card company can’t raise the interest rate on your card for the first 12 months after opening it, unless you are more than 60 days late on a minimum payment.

Despite protections from the law, fine print in the really long credit card disclosure statements and the legalese that’s used can be overwhelming to the average person. That’s why most people don’t read it.

There are some things you should know.

Late payments are an example. Even if you think you’ll never miss a payment, financial complications happen. It’s best to find out what late fees are assessed.

Ask your card holder what triggers a late fee, how much the fee is and whether a late payment will affect your annual percentage rate.

Ask your card holder about its policy on cash advances. If you have opted for a cash advance at a brick and mortar bank or from an ATM, the interest rates are frequently higher than a card’s standard rate.

Financial analysts at Bankrate.com say there is no grace period for cash advances, the interest clock starts to tick right away. So find out what the rules are.

If you happen to travel internationally, ask your credit card holder what constitutes a foreign transaction fee. The fine print may say your card carries such a charge. Fees average three percent. You should ask before you travel.

If you do a lot of foreign travel, shop around for a credit card that has no foreign transaction fee. They are out there.

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