Sometimes I become complacent and start to think that it might be a good idea to sign up for a credit card with a nice rewards program. In order to help battle those thoughts, I like to remember why I don’t want to open myself up to be taken advantage of by credit card companies. In an effort to catalog these stories in an easy to reference place, I will keep a list of my favorite credit card stories right here. Be sure to stop by when you feel tempted to sign up for a credit card.
*Remember, no matter how smart you think you are and how well you manage your credit cards and your payments, you will never have the upper hand! The credit card companies are in control and the burden of proof is on YOU if THEY make a mistake.
Top 10 Tricks of the Lending Trade by Americans for Fairness in Lending - “The tricks of the trade are limited only by the imagination of the lender – certainly not by federal regulations. And they’re all conceived with one end in mind — big profits, not helping you. Fairness to the borrower just isn’t part of the equation.”
Credit Card Companies Want to Eat You Alive! by Lynnae at BeingFrugal.net - “I faithfully make payments to my credit card every month…payments that are larger than the minimum due, I switch to paperless billing, My statement is running late, I make my usual payment to avoid a late fee, The payment ends up being 5 days early because my due date apparently moved, I get hit with a late fee and an increased interest rate.”
Three Paid Credit Cards by Debt FREE Revolution - “American Express has two little nasty habits that make me want to NEVER do business with them again: the first was moving the due date around […] The other nasty little trick American Express pulled on us was double-cycle billing, which means even after I brought the balance down to zero in May, it rose again like a zombie from one of the “Living Dead” movies in June. When I asked them why, they said it was in the fine print that we were on double-cycle billing, which means they were charging us for interest from the month I had already paid!”
Merry Christmas from American Express by My Dollar Plan - “I opened my husband’s American Express credit card bill and to my horror, I saw a $689.72 finance charge. This isn’t what I expected to see on a credit card with 0% interest! We recently did a $59,800 balance transfer. However, it posted under the purchase category at 13.5% instead of the 0% intro rate.”
Credit card industry resists change as fees shock many by USA Today - “Steve Gutierrez of Houston says he was recently hit by a $29 late payment after he paid online 31 minutes after a 3 p.m. deadline. Because his late payment also caused his account to exceed his credit limit, he was socked with a $29 over-the-limit fee. His 31-minutes-late payment cost him nearly $60.”
Five Nasty Credit Card Surprises by US News - “If your credit card company does decide to shift you to a higher interest rate, expect the penalty price to apply not only to future charges but to your past charges. “I can’t think of another business in America that is allowed to raise the price on a good or service retroactively,” says Travis Plunkett, legislative director for the Consumer Federation of America.”
Credit card rates rising, limits dropping by Chicago Tribune - “Arthur and MaryLee Stritch say they always pay on time, have a good credit record and have not taken on more debt in the past year. Yet the Abingdon, Md., couple were notified recently that Capital One planned to raise their interest rate to 15.9 percent, from 9.9 percent.”
Cardholders caught in credit ‘trap’ by MarketWatch - “About one-third of cardholders pay interest rates in excess of 20%, according to a report from New York-based think tank Demos. Also, borrowers with one slip-up can incur a “cascade” of penalties and end up in a “trap” of high-cost debt, the report said.”
If you have a story to tell, send it to feedback at finance and fat dot com and I will add it to the list.
