by Joseph Kenny | 11/10/08

Of all the forms of debt one can incur, credit card debt is perhaps the most complicated. Unlike other sources of debt, it's often never as clear as simply owing money because of a missed payment or an extended loan that has big interest rates. With credit cards, you may be dealing with companies that apply complicated terms and conditions that impose fines and charges for all sorts of things -- sometimes what you're being charged for can seem byzantine or even downright unfair and ridiculous.

When it comes to handling your balances, you should what you dealing with regarding each card and how the terms apply to paying your balance.

These days, the term "fixed" interest rate often bears little or no meaning. Credit card companies can change their rates on a drop of a dime, often with little or no warning in advance. This can affect you if you're not careful, so making payments often and early will prevent your balance from growing ever higher.

Fortunately, the Federal government is working at legislation that forces card companies to honor the term and deliver an accurate statement about how long the fixed interest rate will last before implementing any changes.

Another thing that plagues card holders with debt is that the card companies are often never clear about what changes their interest rate. Even with the most scrutiny, a credit card policy may only offer vague and arcane wording regarding changes to your "creditworthiness" and things like that. Impossible to truly understand, they leave open opportunities for card companies to do quick fixing for the sake of their bottom line -- at your expense.

Some deceptive billing cycles apply as well. Perhaps the most infamous trick card issuers have employed in recent years is double-cycle billing. This basically set up consumers to pay newly acquired interest on balances they've already cleared from their card. Due to the attention the Federal government is putting towards credit cards, companies have largely backed away from this behavior. This entire industry is under heat, and radical changes are being considered to establish fair and just laws for the card companies to follow when dealing with their customers.

Unfortunately, you may have to wait until the beginning of next year to see these Federal changes put into effect. Until then, you're going to have to maintain extra careful diligence and very good spending behavior when it comes to handling your credit card. Nonetheless, even with the changes that are bound to occur, developing good habits now can only benefit you in the future. Just because a card company can no longer exploit you doesn't mean that you should be any less prudent and observant when handling your finances.

In the end, if you simply want to reduce the complications of credit cards and just get the debt done and over with, you have the option of closing the card and paying the balance after the fact. This can eliminate a lot of the nasty conditions that come with your card. It may affect your credit negatively, but it would be worth it because it would prevent worse things from happening to your financial situation.