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Credit Card Fine-Print Pitfalls

Reblogger
Real Estate Agent with 16 Sunview Blvd

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 !

Original content by Jerry Wright

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 some

credit 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. Here

are 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 an

exorbitant "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 your

right 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.

Posted by

Website:   www.BillGillhespy.com

Fort Myers Beach Realtor

Comments (6)

Christie Lane Craven
Blackwell Real Estate - Odenton, MD
Your Anne Arundel County Agent

Another not new, but increasing trend is a secured deposit card.  Where you are securing the card with the initial deposit you make.  Many times this deposit is pretty much your credit limit so you are essentially paying fees and interest to use your own money!

Jul 12, 2010 06:43 AM
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Christie,  So many ways for the credit card companies to get the upper hand on consumers. 

Jul 12, 2010 07:10 AM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

40%--Can you imagine?  I use one to earn air miles but, pay that baby off at the end of the month so that I never have to pay interest.  I can't believe that it's gotten this bad--and I feel for those who miss the fine print and wind up having to carry a balance longer than 30-days.  What a disaster waiting to happen!

Jul 12, 2010 02:25 PM
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Debe,  Imagine how many folks are trapped in the cycle of credit card debt !?!?

Jul 13, 2010 03:32 AM
Ross Quintana
Real E Smarter - Spokane, WA
Real E Smarter Real Estate Coach - 509-362-1966

I remember, when I was younger I had a company call me up and ask for payment, The lady said they were nice enough to lend me the money and i wasn't honoring my part, I told her, that her company jacked the rate up when I was late once, and that over the years they tripled the money they lent me so she was just going to have to wait for her payment. They took my interest rate to 39.9% for missing a payment.

Jul 22, 2010 05:56 PM
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Ross,  Amazing how some big businesses can get away with so much.  Lets hope the new regulations will help even the playing field !

Jul 23, 2010 06:39 AM