Just recently, American's consumer debt (that's everything except mortgages) hit $3.789 trillion.
So what's a trillion? It's a million million, a thousand billion or 1,000,000,000,000.
A billion is a thousand millions, or 1,000,000,000.
A billion seconds ago it was 1986, and then-President Ronald Reagan and then-Soviet Union leader Mikhail Gorbachev opened talks at a summit in Reykjavik, Iceland. A billion minutes ago it was the year 117 A.D. A billion hours ago our ancestors were living in the Stone Age.
But a billion dollars ago in consumer debt was something like just two weeks ago!
Learning how to manage your debt starts with understanding what's in the fine print.
Principle of Fine Print. Never trust the flashy print, the cool logos or the enticing promises. There's always a catch in the fine print. Always remember this: What the big print giveth, the fine print taketh away!
Changing the rules. When you signed by your signature, you gave the company the right to change the terms at any time. It can raise rates, shorten grace periods and basically change the rules and terms to its advantage whenever it feels like it. But it must tell you in writing.
Filler material. This is where it's most likely to tell you about changes. But you think it's just filler material and nuisance ads. Start paying attention. Read everything.
APR. This is the annual percentage rate (interest) you will pay on an outstanding balance. For credit cards it's almost always variable, which means it can change without notice. Your APR may be fixed, but don't let that fool you. Just because it's not tied to an index doesn't mean it will not change. All the company has to do is notify you that your fixed rate has been increased.
Late fee. Miss your due date and you'll get socked with a big, fat late fee, as stated in the fine print. Typically, it's $29, but some have increased that to $39 or more. By law, companies are allowed to set 5 p.m. on the due date in that creditor's time zone as the cutoff time for which that payment is due. This can be a huge trick because if your payment arrives after 2 p.m. in, say, the Pacific time zone (even if you sent it by overnight mail), you're late!
Slip up and pay dearly. If you miss a payment or are late twice, expect your rate to increase automatically, and not just a little bit. It could go to the maximum allowed in your state.
Over-limit fee. Let's say you're close to your limit and your payment is five minutes late, so the late fee puts you over your credit limit. Well, hang on because you're going to get hit with another fine of $29 or more. And if your payment next month doesn't bring the balance below limit, it's going to happen again.
Transaction fees. If you use your card to get cash, buy gift cards or pay the rent or utilities, specific fees could apply. Make sure you know what the fine print says.
Arbitration. Some card companies note in the fine print that if there's a dispute, you agree to go to arbitration. That means if you have a complaint with the company, you'll have to pay for arbitration. You might as well stick a sign on your back that says "Kick Me!"
Mary invites questions, comments and tips at firstname.lastname@example.org, or c/o Everyday Cheapskate, 12340 Seal Beach Blvd., Suite B-416, Seal Beach, CA 90740. This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of www.DebtProofLiving.com, a personal finance member website and the author of "Debt-Proof Living," released in 2014. To find out more about Mary and read her past columns, please visit the Creators Syndicate webpage at www.creators.com.Copyright 2018 Creators Syndicate Inc.