Your Credit Card Is Getting Meaner
Grace periods are down, minimums are up, and fees are getting stiffer too. But you don't have to let lenders' tougher terms raise your costs.
By Carolyn Bigda

(MONEY Magazine) – What's New

Recent changes in financing terms are adding to credit-card costs. A growing number of issuers are shortening grace periods, shifting from fixed to variable rates and imposing stiff fees for late payments on more clients. To meet new federal guidelines, they're also raising minimum payments.

Best Strategies

• Read the fine print. Issuers must inform you about new terms, typically giving two months' notice. If you don't like the changes...

• ...Take action. Transfer your balance to a new card with better terms. Or, before the changes take effect, ask the issuer to close your account and let you pay what you owe under the old terms.

• Adjust automated payments. If you stick with your current issuer and pay your bills automatically, update your settings for due dates and minimums to avoid late fees and other penalties.


Minimum payments on some cards could double by 2006. The upside: You'll pay less interest overall and wipe out debt faster.

SAVINGS NOTES AND SOURCES: CD and money-market account data as of June 14 from 100 Highest Yields ($124 for 52 issues; 800-327-7717). Tax-exempt and taxable money-market fund data as of June 14 from Money Fund Report (; all have a minimum investment of $10,000 or less and assets of $25 million or more. Bond fund data as of May 31 from Lipper; all are medium- and high-quality funds without sales loads and with average maturities of three years or less. [1] Manager absorbed all or some operating expenses. CREDIT NOTES AND SOURCES: All rates subject to change. Credit-card rates are for standard cards as of June 14 from and are variable unless otherwise indicated. Survey does not include Internet-only cards or AmEx Blue. [1] Visa only. [2] Fixed rate. [3] MasterCard only. [4] Platinum and gold cards.