Understanding Your Cardholder Agreement
Posted by: Staff Writer | Jul 20,2007
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A cardholder agreement gives you information about your credit card account. It explains the details of how the contract you're making will work. It really isn't that long and only will take perhaps 10 minutes to read through. Credit card companies are required by law to show you this information and the law was made to protect you. All cardholder agreements will include the following information:
APRYour APR - annual percentage rate - is the interest you pay on the credit you use when you don't repay the money before the end of the grace period. If you have an introductory rate, you will likely find something that says how paying late or missing a payment will end the special rate and what the new APR will be.
Grace Period For PurchasesMost credit cards give you at least 20 days to not have to pay interest on the charge you made.
Grace Period For AdvancesTypically there is no grace period for a cash advance. You start to pay interest immediately.
Fees, Fees, FeesAnnual fees, late payment fees, and over the credit limit fees will each be listed and the amount you will be charged.
Billing RightsYour agreement will include information on the procedure you'll go through if there is a problem with your bill. It will explain how you do not have to pay for the item in question while an investigation is undergone.
Unsatisfactory PurchasesIf you are not happy with a purchase made with your credit card, you have the right to dispute the amount you paid. The process to file a dispute is listed here.
Currency ConversionWhen you buy from a foreign country using your credit card, the credit card company will often charge a currency fee. Also how the rate of exchange is determined is explained here.
Universal DefaultNot all credit cards will claim this right, but many do. Basically your credit card company can raise your interest rate not only if you pay your bill late, but also if you pay any other bill late or miss payments completely.
Collision Damage WaiverCollision damage waiver - CDW - is the benefit of using your credit card to rent a car. What's covered varies greatly with different cards plus it can also depend on what your own driving insurance covers.
RewardsIf your card gives you some kind of reward for each dollar you spend, the rules and regulations as to how the system works will be explained here.
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