Beware: Offers to Skip a Payment
If your credit company invites you to skip a monthly payment without a
penalty, it is not doing you a favor. You will still owe finance charges on
your unpaid balance. And interest could be adding up on any purchases you make
after the due date you skipped.
Beware: Teaser Rates
Some cards are advertised with very low introductory interest rates called
teasers. The rate is good for a short period of time. If you know you can pay
what you owe while the low rate is in effect, it could be a good deal. But if
the teaser time runs out and you still owe money, you could end up paying a
higher rate than you might have without the special introductory rate. Just one
late payment could also cancel the teaser rate.
Beware: Credit Insurance
When you take out a loan for a big purchase, a salesperson may try to
sell you credit insurance. Your credit card company may also encourage you
to purchase credit insurance. The coverage may be promoted as a way for you to
protect yourself if your property is damaged or lost. Other credit insurance
offers promises to make loan payments if you are laid off, become disabled or
die. It is almost always better to buy regular property, life or disability
insurance instead of credit insurance.
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