Member Beware

The average consumer is bombarded with credit card solicitations.  Most offer a “great deal” like 0% Interest for 6 months or a hyped-up Rewards Program.  At first glance they seem like a good deal, but buyer beware…these cards often play “credit card games,” resulting in the cardholder paying more than they bargained for!  Let’s take a look at some of these games:

Penalty Rate Game: This is where the cardholder interest rate is increased to a higher default rate (penalty rate) due to a late payment – even if it’s just one hour.  Note: a late payment fee is assessed separately.

Universal Default Clause Game: This is where the cardholder interest rate is increased to a higher default rate because they’ve exceeded their credit limit.  However, the Universal Default Clause can also be “put into play” when a cardholder does any of the following:

• Has too much debt
• Has too much credit (potential debt)
• Obtains a new credit card
• Applies for a car loan or mortgage
• Bounces a check at their financial institution

Although these games are not consumer friendly, they are perfectly legal.  

Now consider this:

• It would take 18 years & $3,334 in interest charges to pay off $8,000 on a credit card with a 9% interest rate (no additional purchases, only minimum payment made)
• It would take 56 years & $30, 813 in interest charges to pay off that same debt if the cardholder’s interest rate changed to 24% by virtue of the Universal Default Clause.

At ACMG Federal Credit Union, we do not play the credit card games.  We offer 4 different types of VISA credit cards to suit your needs, each with simple & straightforward terms. Stop in or call us today to find out more!