Five Credit Card Surprises

5 nasty tricks from your credit card companies

1. Universal default

If you make late payments or exceed your credit limit, you could be shifted to a default penalty interest rate on your credit card, sometimes exceeding 30 percent. But you could also get socked if you are late paying your electric bill or mortgage, or take out an auto loan, or do anything that hikes your credit score.

2. Future shock

If your credit card company does decide to shift you to a higher interest rate, expect the penalty price to apply not only to future charges but to your past charges.

3. Two-cycle billing

In double-cycle billing, you are charged interest on the average daily balance of two months of charges instead of just one. So if at the end of 30 days you pay off most—but not all—of your balance, the next month you will still pay interest on the sum that you already paid.

4. Grace period

The 30-day grace period for paying your credit card without interest is true only if the bill is paid in full.

5. Pay to pay

Close to your credit card due date, you decide to use pay-by-phone or an online payment at the bank's website instead of the mail to get the payment in on time. Expect to pay a fee of $5 to $15 for the convenience.