Understanding Credit Agreements Can Help Avoid Debt

Due to recent regulations that set caps on debit fees payment processors can collect on merchant transactions, credit card issuers have implemented a number of new charges to existing products to raise revenue.

However, new cardholders may be most the affected by the changes due to their inexperience with the lending system, Forbes reports.

According to a 2008 study, novice cardholders pay an average of $15 in monthly fees, the news source says. Within the next four years of account ownership, these charges were found to decrease by 75 percent, as customers gained the experience necessary to circumvent cash advance fees, late charges and over limit penalties.

The study also showed that the likelihood of a repeat mistake in back-to-back payment cycles among these cardholders was reduced by almost 50 percent over the four-year period of study, according to Forbes.

As a result, new cardholders could be at a greater risk today than in recent years due to new charges on checking accounts and other services. But, by reading and understanding their card agreements, consumers can avoid added debt and missed payments that could hurt their finances.