Sneaky Credit Card Trick #5 - Skip A Payment Invits

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

During the holiday season when our card balances are usually high, credit card companies often send offers which invite us to skip a payment. This might appear to be helpful, more so since it has come at an opportune moment when our balance is high and our wallets stretched. But be careful, whenever the credit card company tries to be helpful there are strings attached.

What is sneaky about skip a payment?

If we skip a payment for a month, the credit card company has allowed us to increase our loan which will accrue a higher interest. The interest for the month (in which we skipped our payment) gets added to our owed balance. Consequently we have to pay interest on this extra amount till our entire balance is paid off. This will extend the number of months it would take us to pay off our balance.

That is not the end of the story. When we initiate a skip a payment most credit card companies charge a fee for it. Usually it is to the tune of $25 to $35.

And the sneaky part is that information about any processing fees and the continuing interest accrual are often nested somewhere on the back of the offer in tiny font aka fine print.

Way(s) out?

Shred such offers. Always turn them down. The extra interest accrued along with the fees charged for skipping a payment will often be higher than our minimum payment. It's definitely better to go ahead and pay our minimum payment rather than "skipping a payment."

Series

» Sneaky Credit Card Tricks - An Introduction
» Trick #1 - Over The Credit Limit Fees
» Trick #2 - No Grace Period
» Trick #3 - Late Fees In Minutes
» Trick #4 - Convenience Checks
» Trick #5 - Skip A Payment Invits
» Trick #6 - Lower Minimum Payments
» Trick #7 - High Cash Advance Fees & Rates
» Trick #8 - Fixed Rates are NOT Fixed
» Trick #9 - 0% APR - Take Care with the Fine Print
» Trick #10 - Beware of Disability Coverage & Card Theft Insurance

Image Source(s): iStockPhoto

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