Win the Credit-Card Game

I suspect credit-card issuers don't want you to know about these tricks of their trade.

• Interest-rate games: Here's the most insidious one: the so-called universal-default trigger, where a late payment on any credit card or installment loan can cause your interest rate to explode -- sometimes 20 or more percentage points -- without clearly notifying you.
  Your issuer probably has some internal triggers, too. And those triggers can be hair triggers: Some issuers cut off the receipt of due-date payments at 9 a.m. Who would consider this to be the end of the business day?

  They can raise your rate if you make a late payment, have too much debt, get a new credit card or apply for a mortgage or car loan -- all without clearly or directly telling you.

• Average daily balance games: Average daily balances are multiplied by interest rates to calculate interest charges. You might think you've paid your balance in full, avoiding interest charges. Guess again. Credit-card issuers are moving toward two-cycle billing, which penalizes consumers who carry a balance even if only occasionally.

  Here's how it works. Suppose you start with a zero balance and then charge something. If you don't pay the balance in full, they charge interest on the entire period, from the date of the first charge. So you end up getting no grace period.

  And you've probably seen your grace periods get shorter and shorter. One of my major cards is down to about 13 days from when I typically receive the bill.

• Payment games: Suppose you make a payment, and a portion of your balance is carried at a low interest rate because you did a promotion or balance transfer. Most card issuers will apply the payment first to the portion of the balance with the lowest interest rate. That's not in your best interest, is it?