Whether you are applying for a new credit card or looking to refinance your current one, it is important to inspect the fine print of your card agreement. You never know if there are rules in the credit card contract that requires you to spend a certain amount, pay for arbitrary fees or have revolving payment due dates. Each of these clauses could in some way hurt your credit score, so it's in your best interest to keep your eyes peeled. Here are a few issues in the fine print that could result in you getting a bad credit score:
Zero percent rates
When you see zero plastered all over a contract, you may think you're in heaven. Some credit card companies will try to entice you by offering a zero percent annual percentage rate. While this may seem good at first, many times it is just for balance transfers or for a limited time. And if you are late on even one payment, you could see this rate increase.
Missing a payment is one of the worst things that can happen to your credit score. These delinquencies will stay on your credit report and result in late fees tacked on to your balance. Credit card companies are all different with how much they charge you for missed payments, but if you are continually late, they could raise your interest rates higher than what you originally signed on for.
If you don't use your card, you could in theory stop yourself from increasing your balance, but there could be some consequences involved. While this rationale seems logical, some card issuers will charge you a fee if you don't reach a certain spending limit. Read your card's contract to see if there are any set limits to your monthly spending and plan your budget around that. Keep in mind that you should pay off that amount as well so you don't raise your credit-utilization ratio.
Each card issuer will be different with the amount it requires for a minimum payment. Your limit and interest rates are just a few components that are factored into this process. Your payments are usually found on your credit card statement, but if you are more curious about what goes into this, contact your issuer to see how you can minimize how much you have to pay each month.