Watch Out for...Short Billing Cycles and Rate Hikes

A number of credit card issuers have shortened their billing cycles which means that you have less time to pay your bill, or a shorter grace period, before being charged interest and late fees.

While federal law requires that credit card payments be credited to the account on the day it was received, there are loopholes. One or two issuers require that the payment arrive by 10 a.m. for the payment to be posted on that date. Any payment that does not conform to the requirements set by the issuer (for example, payment by check or money order, inclusion of the payment coupon, using the envelope provided, etc.) can be posted as late. As of now, federal law does not cover payments made electronically.

A credit card issuer must give you written notice of any change 15 days before the change takes place. This applies to the length of the billing cycle, interest rates, or any other change in conditions. To protect yourself, read those pesky inserts! Notice of changes in fees, interest rates, and other things often go unnoticed by the card user because the announcement is part of a packet of solicitations that comes with the monthly statement.