Credit Card Company Tricks and Traps Every Consumer Should Know

Posted by oink2 Saturday, October 15, 2011 0 comments

Perhaps now more than ever before, consumers need to vigilant about protecting their hard earned money and go about spending it as wisely as possible. One of the most lucrative sectors in all of the financial industry, credit card companies are literally making billions of dollars each and every year by charging their unknowing customers one costly fee or hidden charge after another.
Searching for Hidden Charges
Until the credit card industry is one that’s completely governed by state or federal laws, we must make it a point to being diligent when it comes to protecting ourselves and our money. Although new laws recently enacted are supposed to curtail the practices that have cost consumers countless dollars such as rampant over-the-limit fees, the industry is likely to respond in kind with different sets of fees, less reward programs, and fewer promotional offers.      
Coupled with credit card offers and all new accounts are pages and pages of legalese, all of which are written in fine print and usually ignored or glanced over quickly. Not taking the time to read and understand at least the major stipulations and conditions of a credit card can soon lead to a costly lesson.
To save yourself any unpleasant surprises, as well as a considerable amount of money, examine your credit card statements closely as well as any change-of-terms notifications that come in the mail. Currently, credit card companies are allowed to change their terms any time they like as long as cardholders are given 15 days notice first.
Would you believe that you could possibly be charged for NOT using your credit card? Incredible as it sounds, many companies have implemented a policy of charging what’s referred to as an annual non-usage or inactivity fee, which typically averages around the twenty dollar mark and just one of the many and varied types of fees card issuers use to earn their billions.
Plan on taking your credit card on vacation with you to another country? You may also be surprised to learn that many companies are now charging foreign transaction fees on cash advances and purchases made out of the country, usually averaging three percent of the total purchase.
Fees, Fees, and More Fees
Annual fees are quite common and charge the cardholder a fee of anywhere from $30 to $50 or more per year just for the privilege of using the account. Subprime credit cards, or those that are designed for people with less than stellar credit, are infamous for charging annual fees.
The vast majority of credit cards come with a 0% introductory rate for at least the first few months, which at first, sounds like it could be an excellent deal, provided you know what the stipulations of this deal are.
Know that most companies will cancel this special APR if you’re late with even one payment, and some will even charge you retroactive interest on previous purchases if your debt isn’t paid off completely before the intro period ends.
Hidden catches and fees aside, credit cards can still be a good way to build credit, purchase much needed things we may not be able to afford otherwise, or even fund a new business’ start-up costs. And, although shopping around for the best deal is definitely a good starting place, being totally aware of all the common pitfalls, tricks, and traps used by credit card issuers is the only sure way of managing your finances wisely.



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