Checked in lately with the full-time sentry patrolling your credit card accounts for sneaky fees and penalties? What? You say you haven't got a guard on the payroll?
You do, actually: As the cardholder who signed the dotted line, that duty falls to you.
Let your guard down for just a moment, and the smallest slip-up -- failing to notice a shorter grace period, or forgetting to pay a library fine that triggers a notation in your credit report -- could cost you hundreds of dollars. As I pointed out yesterday, the litany of punishable deeds grows longer every year.
Vigilance is your best defense, and it doesn't take much to keep the bad elements at bay. Here are four ways to get all Ghostbusters on your credit card company, and even eke out a better hand for yourself.
1. Double-check the locks every month
Don't blindly discard that account update leaflet included with your statement. Carefully read the fine print on your cardmember agreement. With each bill, look out for activation fees, annual fees, balance transfer fees, credit insurance and ID theft protection fees, and account inactivity fees. Also, watch out for shrinking grace periods and changing due dates and billing addresses. And don't forget those pesky fees for conveniences, which can strike when you least expect it.
Simply using your credit card while traveling abroad can trigger a festering sore on your next credit card bill -- and not just because of the weak exchange rate. Watch out for currency conversion fees (typically 1% of your total transaction) and foreign transaction fees (an additional 1% to 3%) -- both based on the U.S. dollar value of your total purchase.
Get it done: If you travel a lot, look for a card that's not too toxic. For example, American Express (NYSE: AXP ) doesn't charge a foreign transaction fee, but it does carry a 2% currency conversion fee. Capital One (NYSE: COF ) picks up the tab for both, as does Discover (though the latter is not as widely accepted overseas as Visa and MasterCard (NYSE: MA ) ).
2. Pay on time, every time
The easiest way to avoid rattling the cage is to pay your bills on time. Punctuality is an innocent cardholder's best defense. It's like a bucket of water to a witch -- it withers a lender's penalty-wielding power.
Get it done: If a due date completely skips your mind, call your credit card company ASAP and let them know the check's in the mail. If you have to pay your bill the same day by phone, prepare to cough up $15 or more. Writing due dates on your calendar is a much cheaper way to go.
3. Call your lender and beg for absolution
A flub here and there needn't lead to a few months -- or years -- in the cardholder stockade. An occasional slip-up (going over your credit limit or paying a bill late) can be easily remedied, as I'll explain in a bit. Even the worst kinds of gaffes do have workarounds.
For example, The Consumer Action survey reports that Capital One, JPMorgan Chase (NYSE: JPM ) and Citigroup (NYSE: C ) will work with customers to stomp out certain charges. The catch is that avoiding certain fees may require you to pay off your balance in full (which we of course applaud) or close the account altogether (which may have negative consequences on your overall credit score).
Get it done: If you aren't a frequent offender (meaning no 30-, 60-, or 90-day late payments in the past nine to 12 months), ask the man behind the 1-800 customer service curtain to forgive a one-time gaffe (and a late-payment or over-limit fee).
4. Snag a better credit card deal
As long as you're on the phone with customer service, see whether you can improve your relationship. Ask for a lower interest rate: Studies show that more than half the people who call their credit card customer service departments succeed in reducing their annual interest rates by an average of one-third. One phone call can save you more than 700 clams. Seriously. Don't like that shorter grace period -- or want to change your due date? Just ask. Your lender would rather keep you as a customer than shell out $50 to $150 to find a new one.
Get it done: Pick up the phone, stat, and ask for a lower rate; then see whether you can transfer your higher-rate balances to that card. Tread carefully, though, since winning the balance-transfer game requires vigilantly monitoring the terms and conditions of the deal.