MEMBER PROFILE

Renee Marquis

I participated in the IDA First Home Club in 2000, but later on decided to use it to start my own photography business instead. With the IDA funds I was able to buy a camera and computer. I loved attending the Business CENTS class! It really helped me to write a business plan. It also taught me that networking is really key. I really felt like I could contribue to the class as well as learn from others there. I now have four photographers that work for me.

Tip of the Week: Read the fine print on your credit card!

You may already know that many credit card companies have a higher interest rate that increase for cash advances and transfers than for purchases. Some may have high annual fees, and we know we can be hit with extra fees and higher rates if we make late payments.

But…do you know that the interest rate on your credit card can skyrocket without your knowing it?

Credit card companies now have what's called a Universal Default Clause. This clause gives credit card issuers the right to impose a higher interest rate on your card -- including your past purchases -- based on the way you handle other credit accounts. The decision to increase interest rates can be based on a review of information in your credit report, including how much credit you carry in general and on other cards.

Did you know that in many cases a credit card issuer can raise your rate if you've started using what the issuer might consider to be too much credit? That issuer might decide that outstanding balances are going up too quickly, or that you have too many revolving accounts with high balances. The Universal Default Clause gives your credit card issuer the right to slap on higher interest rates when you look like your risk for repayment is increasing.

The sting that you feel from these rate boosts is made worse by the fact that most penalty rates are variable and go up with the prime rate. One credit card company has a maximum default rate of 23.99% plus prime. The prime rate is now 8.25%. So the default rate can be as high as 32.24%!

Don't get distracted by those come-ons that entice you to use plastic. Instead, when you receive a new credit card offer, focus on the fine print and on the prominent "disclosure box" that, by law, must accompany every offer. There, you'll probably find the less-than-advantageous aspects of your new credit card offer.

Bottom line: Don't be fooled by those "great" offers with really low interest rates! Read the fine print!