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Letter to Dispute Interest Rate Increase for Credit Card

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									                         Consumer Affairs Tabloid
                                   Keeping you in the “KNOW”
    287- CITY                       Army Co mmunity Service Financial Readiness Branch                      May 2006


                                              The Federal Reserve Board
    Choosing a Credit Card        www.federalreserve.gov/pubs/shop/default.htm

    Most credit cards charge fees under certain circumstances:
     Annual fee (sometimes billed monthly). Charged for having the card
     Cash advance fee. Charged when you use the card for a cash advance; may be a flat fee (for example, $3.00) or a
        percentage of the cash advance (for example, 3%)
     Balance-transfer fee. Charged when you transfer a balance from another credit card (Your credit card company
        may send you “checks” to pay off the other card. The balance is transferred when you use one of these checks to
        pay the amount due on the other card.)
     Late-payment fee. Charged if your payment is received after the due date
     Over-the-credit-limit fee. Charged if you go over your credit limit
     Credit-limit-increase fee. Charged if you ask for an increase in your credit limit
     Set-up fee. Charged when a new credit card account is opened
     Return-item fee. Charged if you pay your bill by check and the check is returned for non-sufficient funds (that is,
        your check bounces)
     Other fees. Some credit card companies charge a fee if you pay by telephone (that is, if you arrange by phone for
        payment to be transferred from your bank to the company) or to cover the costs of reporting to credit bureaus,
        reviewing your account, or providing other customer services.




                                           The Federal Trade Commission

    Choosing and Using Credit Cards www.ftc.gov/bcp/conline/pubs/credit/choose.htm
    Errors on Your Bill. Issuers must follow rules for promptly correcting billing errors. You'll get a statement outlining
    these rules when you open an account and at least once a year. In fact, many issuers include a summary of these rights
    on your bills.
    If you find a mistake on your bill, you can dispute the charge and withhold payment on that amount while the charge is
    being investigated. The error might be a charge for the wrong amount, for something you didn't accept, or for an item
    that wasn't delivered as agreed. Of course, you still have to pay any part of the bill that's not in dispute, including
    finance and other charges.
  If you decide to dispute a charge:
         Write to the creditor at the address indicated on your statement for "billing inquiries." Include your name,
     address, account number, and a description of the error.
         Send your letter soon. It must reach the creditor within 60 days after the first bill containing the error was
     mailed to you. (Consumer Affairs suggestion: send letter certified return receipt)
  The creditor must acknowledge your complaint in writing within 30 days of receipt, unless the problem has been
  resolved. At the latest, the dispute must be resolved within two billing cycles, but not more than 90 days.
Charge
9.9% APR                          Federal Deposit Insurance Corporation

 Credit Card Savvy Students Handout www.fdic.gov/consume rs/consume r/ccc/savvy.html

 What Many People Do Not Know About Credit Cards

 1. If your credit card uses different rates for purchases, transfers, and cash advances, realize that the card issuer may
    pay the lower interest rate balance first. Consequently, if you carry a balance, your high-rate cash advance may not
    be "paid" until all lower-rate balances are paid in full.
 2. Fixed-Rate credit cards are not fixed forever. Rates can be changed at any time, as long as the card issuer
    provides 15 days advance notice of the change in terms. Fees may also increase. These "Change in Terms" notices
    are usually included with your monthly statement. (* Inserts included with the bill – Do you toss these out without
    reading?)
 3. Your interest rate may dramatically increase if you make late payments. For example, some issuers will raise
    your interest rate to the maximum after one or two late payments. Consequently, your 12% credit card could
    quickly turn into a 25% credit card.
 4. Your credit card issuer may also raise your interest rate after conducting a routine credit report review. (*Look
    for a “Universal Default" clause in your credit card agreement. This allows them to raise your interest rate if
    you're late making a payment -- even to someone else.)
 5. The 25 day grace period only applies when you pay-off your entire balance due each month. If you only pay the
    minimum payment, interest is immediately accrued from the moment you charge something to your credit card.
    Some companies are also shortening the grace period to 20 days, and some cards have no grace periods.
 *Consumer Affairs comments & additional information

                                                                                                                    Cash
                                                                                                                 Withdrawal
                      From the Files of Fort Hood’s Consumer Affairs Office                                      20% APR

 More on choosing a credit card
 When choosing a credit card there are many factors to use when comparing offers. Ask yourself the following
 questions:
 What is the Annual Percentage Rate for purchases, cash advances, balance transfers, and if you pay late?
 Is there a grace period and what are the terms?
 How is the finance charge calculated?
 What are the annual, late-payment, over-the-credit-limit, and set-up fees?
 What type of interest does the card have? Fixed, variable, or tiered?
 What are the cash advance limits, credit limits, and other features?
 Do the terms Annual Percentage Rate, Average Daily Balance, Variable Rate, Minimum Finance Charge, and Two-
 cycle Balances throw you for a loop? Do you have question on finding this information on your credit cards? Do you
 want more information on making a wise credit card choice? If so please click on the links listed in this tabloid and
 read the complete article. If you don’t have access to a computer give our office a call and we will print out a copy for
 you.

 Back issues of the Consumer Affairs Tabloid are available on the Fina ncial Readiness section of the ACS
 website at www.hoodmwr.com/acs.
                   Have questions? Contact: finreadiness@hood.army.mil              287-CITY (2489)

								
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