How to make sure you really get the introductory rate you were promised.
Here are some moves the credit card companies will try, and tips on how to outwit them:
* Playing "gotcha!" with late payments *
If you make a late payment, the company wins. Buried in the fine print of their introductory rate offer will be a rule that says they can raise your rate, usually to some ridiculously high amount, if you are ever late on a payment.
To outwit them, make sure all your payments are on time. Do what it takes to get organized, so you don't overlook your bills. Send in the payment early. Consider signing up for auto-pay directly with the credit card company or, if you pay your bills online, through your bank or whatever payment system you use.
If despite all your best efforts, you are late with a payment, you can usually get one free pass. Call up customer service at the number on the credit card. Explain nicely that you overlooked the bill, or had an emergency, or whatever it was that happened, and say you're sorry. Then ask if they will give you a refund for any late fees and ask them to not raise your introductory rate. If you have a generally good credit record, they will often give you what you ask for, at least the first time.
* Tricking you with two-tier interest rates *
Often, companies will give you the introductory rate only for your balance transfers. Purchases will have a higher interest rate. If you carry balances at both the introductory and the higher rate at the same time, the company wins.
The way they win is by applying your payment to the lower-interest balance first. You can keep on paying and paying for a long time and never make a dent in the higher-interest balance.
To outwit them, use your new card only for your introductory-rate charges until those balances are completely paid off. Use other cards for your purchases.
* The ending date *
All good things eventually come to an end, and so will your introductory rate. If you had planned to pay off your balance before the introductory rate expired, but then you forget, the company will win.
To outwit them, set up a system to remind yourself when the rate will expire. Mark your calendar, or make a note in a file.
Companies may also make it difficult to figure out exactly what the ending date is. They will use confusing language. To outwit them, take the time to figure out exactly what they mean.
* Interest hidden as transaction fees *
You may get what looks like a great introductory rate, but companies can win by tacking on a transaction fee.
To outwit them, calculate how much interest the transaction fee will add. To do that, take the amount of the transaction fee and divide it by the number of months you expect it will take you to pay off your introductory balance. Divide that by your balance. Then multiply that by 1200. That will give you the annual percentage rate. Is it higher than what you want to pay? Then look for cards that have lower, or better yet, no transaction fees.
