credit & debt

Credit Card Features

Make sure you know what fees and rates your card issuer is charging.

Credit cards are convenient, but you can pay a price for that convenience if you're not aware of the fees companies tack on. You also need to pay attention to the interest rate on your card and what protection the card company offers you against fraud. Here are four things to be on the lookout for when applying for a card:

Annual fees. These charges can run up to $20 for the run-of-the-mill Visa or MasterCard, and up to several hundred dollars for premium airline rewards cards. As the credit card business has grown more competitive, card issuers have shown a willingness to drop the annual fee for customers they'd like to keep. If you think your fee is too high, ask to have it waived.

Interest rates. Interest rates are set by the bank or savings and loan that issues your credit card, not by the card company. Issuers have to stay under the interest limits set by the state in which their headquarters are chartered. But that's rarely much comfort because the limits are often 13% to 16%, or more. Introductory rates, which may last six months or a year, are often lower.

Other fees and charges. You will be charged interest on cash advances, a fee for paying late, and possibly a fee for exceeding your credit limit.

Protection against fraud. Plastic credit is pretty safe. If your card or your card number is used fraudulently by someone else, the law limits your liability to $50, and issuing banks often don't make customers pay even that much. If your account is used fraudulently to charge something without actually showing the card-say, if someone orders merchandise over the phone or online-you owe nothing. All this is provided you report the fraud within 60 days of the date of the statement on which it appears.

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