Credit Card Fine-Print Pitfalls
In my family my wife handles the paper work/bills. When I read the following post on credit card company tactics I was amazed at how easily consumers are taken advantage of !
Credit card companies are great at marketing their latest features, but before you sign on the
dotted line, read the fine-print carefully and look for some of the following fine-print pitfalls:
Cash Advances
- The convenience of getting cash is very expensive when it comes to somecredit cards. Many credit cards not only charge an upfront fee of up to 4% of the advance, they also
carry higher interest rates than other charges on the same card, and have no grace period
whatsoever. But here's the sneaky part: many credit card companies will require that balances for
regular purchases be paid off before you begin paying off the balance of the cash-advance, which
is often hit with a much higher interest rate.
Killer Fees
- When it comes to fees, no one is more innovative than credit card companies. Hereare just a few: account set-up fee, program participation fee, account maintenance fee, authorized
user fee, credit limit increase fee, Internet participation fee. But, the trickiest credit card fee for
consumers who are looking to improve their credit scores is the annual fee. Forced to keep the account open to demonstrate a history
of good payments to the credit bureaus, consumers end up paying annually for that privilege.
Universal Default Clause
- The universal default clause is an egregious provision that allows credit card companies to tack on anexorbitant "penalty" interest rate if a consumer is late on any of his or her bills, including items like utility bills. According to the
advocacy group, Consumer Action, most default interest rates hover around 30%, but it's not uncommon to see a penalty rate of up to
35%. Some analysts have even reported rates in excess of 40%!
Binding Arbitration
- Some credit companies have a binding arbitration clause. By signing this agreement, you have waived yourright to a jury trial if a dispute arises between you and the company. Your case must be settled by an arbitrator. And the arbitrator is
often chosen and hired by the credit card company.
Changing Terms
- The terms and conditions of credit cards can be easily amended by the lender with a simple written notification.This notice usually accompanies the monthly statement. Some reports suggest that many consumers simply end up trashing the
important notification, along with the usual pile of unwanted marketing material also enclosed in the envelopes, without ever reading it.
Don't let this happen to you.
If you think of any other credit card features I should add to my list, please give me a call.
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