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Get the FACTS about Credit Cards...

Here is what you need to know...
   to break free of Credit Card Karma:

Credit Card Tips...
What the Credit Card Companies
   Do Not Want You to Know!

* Deadbeats and Revolvers: Here is how card companies classify you!

The credit card companies call those who pay their balances in full on time... deadbeats! This is because they do not make their REAL money on the discount rate (the 2-5% of the sale they get from merchants) which is all the deadbeats pay.

The REAL profit comes from finance charges on outstanding balances from debtor customers they like... the revolvers. Credit card companies WANT you to carry the largest debt you can possibly repay.

* Debt-iquette: Here are what the following terms really mean:

* Credit Counseling: Financial services for dummies. Here is all you need to know... spend less than you make, pay more than the minimum balance, and stop charging until you pay off your debt.

* Debt Consolidation: If you are consolidating your debt on their credit card, you are a big revolver and they are glad for the finance charges... otherwise you are a deadbeat they are well rid of.

* Debt Negotiation: Attorneys, mediators, and others call the card companies and rack up fees (you pay) for them to convince the card company to reduce your interest rate, your debt, or both.

* Debt Settlement: The card company knows when there is no more blood they can squeeze out of your arm so it behooves them to agree to take what they can get from you through debt negotiation.

* Debt Reduction: The card company has written off your bad debt and your name along with the word bankrupt are blasted across the financial network... your credit score bottoms out.

* Debt Elimination: You have climbed through the Federal legal loophole and have exited the world of credit forever. Your credit score is gone... and the best you can hope for is a debit card.

* The Ever Revolving Debt: If you are a revolver, know this:

The larger your outstanding credit balance, the more offers you will get to open another card, the more your credit limit gets raised, and the lower your minimum payment becomes. Quite simply, revolvers (unless they decide to become deadbeats) will never get out of debt unless they go bankrupt.

* The Shrinking Grace Period: If you are a deadbeat, know this:

Credit card companies used to offer a grace period of 30 days. If you paid your balance in full during that time, you were charged no interest on your purchases. Since card companies do not make money on "good" customers, grace periods are starting to shrink to the 20 to 25 day range.

* Bill Me Twice Again: Are you are on "two-cycle billing" credit card?

* The Best: If your interest is computed on the "adjusted balance method", then interest is only charged on the account balance remaining after payments and credits during the billing cycle.

* Ok, Not Great: If your interest if computed on the "average daily balance method", then interest is charged on your average daily balance during the billing cycle.

* The Worst: If your interest if computed on the "two-cycle balance method", then interest is charged on your average daily balance of purchases from BOTH the current and the last previous billing cycle (even if you paid in full last time).

* The Outrageous Cash Advances: Do you use your credit card as an ATM?

If cash is what you are buying with your credit card, then there is no grace period... you begin paying interest on them immediately. The interest rates on cash advances are typically much higher than the ordinary interest rate on purchases of anything other than cash (in the 15-30% range).

* "Crimes & Misdemeanor Fees": Here is what you can be paying...

* Late Fees: If you are late, you should pay a fee for not honoring your debt obligation. Yet these fees are double or triple what they used to be a mere 5 years ago.

* Over-Limit Fees: If you are over your limit, the credit card company should have declined the charge but nowadays, they will just sock you with an over-limit fee which was non-existent 5 years ago.

* Penalty Rates: If you are late or over-limit too often: your interest rate can soar. Your interest rate class can be changed. You used to pay 13% and it changed to 20% or more.

* Penalty Fees: If you use even your credit cards "outside its terms", you can be assessed extra fees even if you were not late or over the limit. Screw up on one card and it effects them all.

* Terms Subject to Change With Notice: Credit card companies can change your interest rate anytime (raising it or changing it from fixed to variable), provided they give you 15 days notice.