Obscene is usually associated with pornography while credit cards enjoy a more discreet association. At least that is the perception. This article will change your perception.
It is my belief, and may become yours after you read the 7 tricks, credit card issuers should be classified with pornographers. They have, I believe, only one purpose and that purpose is to screw every consumer using their cards as the tool.
I say that not because I am anti credit card. Far from it. I have eight in my wallet and use two of them on a regular basis. I also apply the anti-dote every month to their poisonous bites. But, I am ahead of myself and will give you the anti-dote at the end of this article.
By the way, this article only covers what I classify as the top 7 obscene, nasty ways credit card issuers relieve you of money that should rightfully stay in your wallet. I cover them all in a book I wrote which is in my bio at the end of this article.
This first trick is called the universal default penalty. As you may or may not know, credit card issuers regularly check your credit report for late payments on any of your bills. Even though you have been paying your credit card bill like clockwork every month and have never been late, you still can see a spike in your interest rate because you were late with, for example, your car payment.
The UDP clause permits your card issuer to raise your rate no matter in what account you were late. This clause is found in a document called Terms and Agreement which, by the way, you were given when your card was issued. Probably came in the same envelope.
You didnt read it. I know you didnt because the font is about 3.5 in size and it is written in legalese. You threw it away or put it in your file cabinet or desk drawer where it is still resting today.
This doesnt give them the right to monetarily take you to the cleaners but they know you wont read it so they take you to the cleaners. All legal by the way because the legislation is written for them and not for the consumer.
Proof of my contention is found in your Terms and Agreement and in the credit card laws. Take the time to read one or the other and you will use stronger language than obscene or tricks when you talk about credit card issuers.
Trick two is one called the over the limit fee. Simply stated, if you charge over your credit limit, you are penalized a sum of money. As of this writing, it is between $25 and $50, depending on card issuer.
Think about this charge for a minute. Who set your limit? The credit card issuer. You didnt. So, if you have a $1500 limit, how can you over charge given their computer is preset with that amount and is supposed to block any more charges once you hit $1500?
Since the credit card issuer imposed the limit, how can they charge you a fee for exceeding the limit? If you exceeded the limit, they had to grant permission, right? If they granted permission, than they just reset your limit to a higher amount. So, if they reset your limit to a higher amount, you cant be over your limit, can you?
Wrong. Read the Terms and Agreement. They have a little clause permitting them to do exactly what was just described without penalty to them but with a penalty to you.
I dont know about you, but to me this seems like a punch below the belt.
Trick three is a neat little jewel called the special delinquency rate. If you have a card with a low interest rate, you may experience a rapid rise in that rate if you are late a certain number of times in nay specified time period. One particular huge credit card issuer has set the number of times to one. Ouch!
Trick four is the transaction fee. A transaction is nothing more than an action (charging a blouse for example) between you and the merchant. This results in an activity on your card. What else could it possibly do?
Well, since it resulted in an activity, a transaction fee is imposed. But isnt that what the card is set up to do in the first place? The answer is yes but the transaction fee increases their profits so its inherent action (an activity) gives rise to a fee.
Trick five is called a maintenance fee. You dont even have to use your credit card and you will be charged. You guessed it. The maintenance fee rears its ugly head. I call this a privilege tax because the company is charging you just because you have their card.
Trick six is a doozy called a service charge. This is a fee for specific services or imposed as a penalty for not meeting certain requirements. For example, applying for a card is considered a service, so a service charge is applied.
Trick seven sounds like one or two of the above fees but is actually imposed on top of all the others. An inactivity charge is imposed if you havent used your card for a certain period. For example, lets presuppose a six month period. You would face an inactivity charge if you didnt use it during that six month period.
Trick eight (yes, I know the article says 7 but this one is particularly onerous too) is the two-cycle billing trick. Most of us have cards that bill on a one month basis, i.e., charge today and payment is due next month.
Two-cycle billing uses your two previous months balances. The math varies a little bit by issuer so rather than give one across the board example, Ill advise pulling out your Terms and Agreement. By law, this particular deviousness must explained in detail.
If you cannot understand their terminology, math or anything else in that section, ask your banker for an explanation.
OK, now that you know eight of the time bombs your credit card issuer has placed in your wallet, you are armed to take action. When I first opened this article, I said I would give you the anti-dote to their poisonous ways.
I pay the balance in full , a.k.a anti-dote, on every credit card I placed a charge by the due date shown on that cards statement. You see, the Terms and Agreement does do one good thing for us consumers. It says if we pay in full by the stated due date, we will not face any of their myriad charges and fees.
It is that simple. I watch how much I charge and I pay the balance in full no matter how financially painful it seems at the time.
As a famous commentator used to say, End of story.
About The Author
Tom Koziol wrote Credit Card Capers: All Their Dirty Tricks Exposed to level the playing field for consumers when it comes to their credit cards. For more information, visit: deadrun@jps.net
