Dirty Credit Card Tricks
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7 'Games' Companies Play
Personal Finance experts, Ken & Daria Dolan, have found most credit card companies are downright ingenious when it comes to cooking up sneaky new credit card fees and dirty tricks to take more money from you.
Click through our gallery to reveal seven of these tricks to look out for and, of course, avoid.
Next: Dirty Trick No. 1 -
Dirty Trick No. 1:
Say "Bye-Bye" to Your Grace Period
No grace period means that you’ll start accruing interest the moment you charge something and that can cost you a bundle of “extra” interest. Most credit card issuers have already reduced their grace period from 25 days to 20 days. Many others have eliminated the grace period altogether. Now they are coming up with more and more reasons to take away your grace period. Miss a payment? Stop carrying a balance? Bye-bye grace period!
Next: Dirty Trick No. 2 -
Dirty Trick No. 2:
Punishing You for Being Smart
These fees are the lowest of the low because they penalize you for being a responsible credit card user. Some of the biggest offenders include charging you a fee for:
· Closing your account
· Failing to use a card for a period of time (such as six months or a year)
· Not carrying a balance
· Every transaction each and every time that you use your card
If your card charges you any of these fees, it's time to look for a new card!
Next: Dirty Trick No. 3 -
Dirty Trick No. 3:
Sending "Convenience" Checks
Credit cards often send you "convenience" checks so that you can write checks against your credit card account. Isn't that nice of them? Please! DON'T do us any "favors"! What they bury in the fine print is that these checks usually carry a very high interest and fees -- even higher than regular credit card charges. Some cards also give you no grace period on convenience checks, so you start paying interest from the day you write the check! Shred these little "gifts" whenever they arrive.
Next: Dirty Trick No. 4 -
Dirty Trick No. 4:
Inviting You to Skip a Payment
In their infinite generosity (ha!), some cards will "invite" you to skip a payment. This "helpful" offer, which sounds great at first blush, often comes after the holidays when your balance is big and your wallet is stretched. DON'T DO IT! Skipping that payment can lead to a host of trouble from a higher interest rate to possibly having to make extra payments in the future. Are you starting to notice a pattern?! You should be skeptical whenever your credit card company does something "nice" for you without you asking for it!
Next: Dirty Trick No. 5 -
Dirty Trick No. 5:
Lowering Your Minimum Payment
Another way some cards try to jack up their profits and lure you deeper into debt is by lowering the minimum payment due on your balance. It used to be cards required a minimum monthly payment of about 4% of your balance, but many now require as little at 2%. Don't fall for it! Going from a $40 payment to a $25 payment on a $2,500 balance means it will take you an extra 19 months to pay off your balance!
Next: Dirty Trick No. 6 -
Dirty Trick No. 6:
Tricky Timing
We all know that our payment is due on a certain date or it's late, right? But a new twist being thrown into the mix is having your payment due by a certain time on the due date. If your payment is due at noon, and gets processed at 12:01, you get socked with a late fee AND likely a higher interest rate. Gimme a break! Carefully check your statement so you avoid this trap.
Next: Dirty Trick No. 7 -
Dirty Trick No. 7:
"Over the Limit" Fees
Credit cards charge you a hefty fee for going over your credit limit. Look, we don't have a problem with penalties for that. But now these fees have gotten excessive -- almost $40! Plus, credit card issuers don't exactly discourage you from going over your limit when they approve charges and balance transfers that put you over your max.
Next: Before You Sign ... -
Jamie Koslow, AOL
Dolan's Smart Credit Moves
Now you know how to avoid these 7 traps, but credit card companies will keep dreaming up new ones. So:
Don't sign on with a card until you have a list in writing of all fees that the company charges. You can find these in the small-print section of your application. Or, if you apply online, you will have to agree to all of the terms and conditions as part of your sign up process. You can always call the company, too.
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Ken & Darian Dolan
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Recent Comments
Slevchenco 01:28:16 PM Jan 24 2009
How about when you actually pay your cc on time every month nnever late never miss a payment , and then they for no reason what so ever lower your credit limit , which makes your FICO score drop, then the other CC Co. see your lower score and do the same thing or just not approve you for something you would have gotten if the 1st CC Co ( Sams Club) didn't do it to begin with, can some one please tell me how they can do that , them doing that are the ones who damaged my credit by doing so , even though I paid the 100% as I should never late , etc for 4 years that I had that account I feel like sueing them for ruining my credit , there has to be some kind of trouble they can get into for doing that to me........( Very fustrated in PA)
KailingMA 07:27:44 PM Jan 18 2009
Aren't there usury laws anymore? Also, a debt should be removed after seven or so years, but that doesn't happen anymore; they just keep adding interest to a debt that is 25 years old. (Sears did this to me over a bed we bought our son at age ten---he's 32 now!! My husband agreed to pay when we got divorced, then years later Sears is calling me because the account was in my name because the ex had lousy credit.The bed cost $100 and they want $16,000 from me! Sheesh!
Nmsewell 12:21:35 PM Sep 04 2008
Iâm the kind of person that uses their credit card for *everything* (even the most trivial purchasesâlike transactions under $1.00) because I hate carrying cash (especially coins), and I can track all my purchases. But because Iâve never carried a balance and always paid in full, I thought I was ok, until I read this article (I know the bank already hates me for not carrying a balance). Bank of America has been offering me a âpayment holidayâ for last 16 months (I donât have to make my $10 minimum paymentâitâs always been $10, despite how much or how little Iâve charged to my card), but Iâve never taken their bait. Last month I got my Chase Visa (my back-up card) bill 5 days before it was due, leaving like no grace period, so Iâve severed my ties with them. My grace period (30 days) is important because thatâs my interest free loan. I once had an accounting professor that said the best time to make a large purchase on your credit card is right after your bill cu
Davidejack 10:49:19 AM Sep 04 2008
Recently, I have been informed that the Credit Card Companies...Banks...are loaning all of this so called "money" without the funds to back it. Is this not illegal?? How can they "loan" a trillion dollars to credit card holders when they only have a billion backing it? Then they charge us the outrageous fees and interest on money they don't even have? I don't understand it all, but if they are doing this, IT IS ILLEGAL! Will someone who knows law and understands what I am trying to say please explain?
retunivac 03:43:20 PM Jul 07 2008
owwsetton.................are you a credit card shill ?
Hwystargogo 11:32:07 AM Jul 07 2008
one day i got a check for about 6,000.00 dollars in the mail. i didn't appliy for it and all that was stated is the payment amount. i was not employed, i'm raising my two grand children. I've moved to texas from cali. I have since found out the deffered payment is 27,000.00 I have more then paid off the princeble and i will pay no more. They had me agree to a payoff amount by paying 572. for 4 months. I told them i wanted a letter stating this. after four requests no letter ever came. my statments still said I had a 9,000.00 balance. I will not take food out of these kids mouths any longer i don't care if they ruin my credit. this is a big company. as far as i'm concerned they can take a flying leap.
Subsinn1 02:22:54 AM Jun 20 2008
WAMU are the worst of all the Credit Cards Company. They going to keep on raising your interest rates because they can. My interest rate are over 31% and keep going up. I am glad their whole entire company are going down the drain and laying off thousands. They get what they deserve. Bad thing happens to bad people and WAMU you guys are the worst.
BostonRanger175 01:45:57 AM Jun 05 2008
WaMu I agree with the Statements about WaMu. They great and friendly during the loan process but once they got you, yo. u're better off dealing with the mob. I ca only hope that there are some changes in banking pratice and give some control back to the consumer. Only postive thing that come out of dealing with WaMu how to approach future lenders in the future. But in the mean time I tell anyone I know if you get anything from them to throw it away. If you choose to deal with them drill them into the ground on all aspects of there contract and keep good accurate and easy to reach records. You will need them.
HJSBach 12:53:52 PM May 31 2008
Call the issuer if you receive convenience checks. I had some stolen from an ordinary mailbox. I didn't know those checks were coming, and they were not with my monthly statement, I'd never used any and didn't want them. Someone else wanted them, stole them from my mailbox - and the first thing I knew of them was the bill I got from the bank for $750.
Call and tell them not to send ANY to you. And get a locking mailbox, as we did.
DWidow21 11:37:52 AM May 31 2008
People pay attention....Credit cards are the loan sharks of years ago ...they are the new day MAFIA................They may not break your knees any more cause they found a new way to break you permanantly.................KILL YOUR SPIRIT>>>>SCREW THEM ALL
