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It's
no surprise that credit card companies are in the business to make money. But
you may not be aware of some of the tricks and tactics they use to gain even more
of your hard-earned dollars. All of the following strategies are legal, leaving
you no alternative but to become educated and protect yourself whenever possible.
Here are some things to look out for:
1.)
Bait and Switch - You apply for a great credit card offer you've just received
by mail expecting to not only save with a low interest rate but earn miles for
your next vacation. But when the card arrives and you see the terms, you realize
that the interest rate is higher and there are no rewards. This happens when you
don't qualify for a platinum offer and the company sends you a standard credit
card. Don't activate the new card - call and cancel the account immediately. 2.)
Delayed Mail Delivery - You lose the envelope that was enclosed with your
monthly statement so you hand post a generic envelope and send your payment on
its way only to find that your payment was received late; you now have to pay
late fees and possibly a higher interest rate. So what happened? The address you
used had been changed! Always use the envelope enclosed with your bill to submit
your payment. If you have to address you own envelope, verify the address on the
front of the statement or by calling the customer service on the back of your
credit card. 3.) Delayed Mail Delivery
II - Your payment due date is clearly posted on your statement-- but the fine
print may indicate an exact time. To avoid late fees and increased interest rates
your payment may be actually due by 1 p.m. Remit your payment 10 days to insure
on time delivery. 4.)
Over-the-Limit Tricks - When you apply for a credit card it often includes
the option of transferring your balances from higher interest rate credit cards
to the new account. You expect to receive a credit limit large enough to cover
this transfer. But, if you receive approval and find that the allowable credit
limit is lower than you anticipated, your transfer may put you over the limit
even before you have the card in your hand. Never transfer a balance until you
have the new terms in hand. 5.) Costly
Cash Advances - Your low APR will be useless if you take a cash advance. With
no grace period to pay the money back, you will start interest payments immediately
in addition to a fee of between 2 and 4 percent of the advanced amount. Plus,
all of your payments will be applied to the lower-interest balance before they
are applied to your cash advance. 6.)
Not So Fixed - Although it's called a 'fixed rate', its not always what it
seems. Credit card companies can still raise your interest rate at any time. The
only difference between a 'fixed' and 'variable' rate is that the issuer must
give you 15 days notice before they raise your 'fixed rate'. 7.)
Half Forgiveness - An unintentional late payment can be appealed by calling
the company and explaining the situation. You get off the phone and breath a sigh
of relief after your late fees are removed. When your monthly statement arrives
in the mail, you find that the late payment fee was rescinded but you're now being
charged a much higher interest rate.
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