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Credit card companies appear to have free rein when it comes to charging you more money then you owe and taking advantage of loopholes in the system to force you to pay more money. They are able to get away with this because the laws allows for it and also because they warn you of these tactics in the fine print. The problem is that most people either don’t read the fine print or don’t understand it. Therefore, people aren’t aware that their interest rates can be raised, expiration dates changed and late fees charged when and how the company decides. Sometimes consolidating your bills is the best way to get around these dirty tricks. In this article, we will discuss five ways in which credit card companies manipulate the system and their power to get you to pay more money.
Poor Credit Penalties: Credit card companies will periodically take a look at your credit report. They're looking to see if you have paid any of your bills late, even those that are not owed to them. If they find that you have, they will use this information to raise the interest rate that you pay them. This can occur even if you have made all of your payments on time to that particular credit card company. If you are late paying your water bill, then credit card companies are legally able to increase your interest rates. Today, over 40% of credit cards have this policy in place. -
Misleading Advertisements: Credit card companies will send flyers in the mail advertising low interest credit cards. However, the fine print will state that only individuals with a predetermined credit score will qualify for them. If you don't read the fine print or don't understand what is written, then you may sign up for the credit card, only to receive one that has a significantly higher interest rate. The truth is, you never qualified for the low interest rate.
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Shorter Grace Periods: In the past, a grace period was typically 30 days. Today, it may be as short as 20 days or there may be no grace period at all. Often times this information isn’t stated plainly to the customer, and the customer assumes that they have 30 days to either make payments or to pay off the balance. In some cases of individuals may have their due dates changed or the grace period shortened out without notice. This results in late charges and penalties.
Charges For Not Using Your Credit Card: Some credit card companies are looking to make money even if you don't use your credit card. Some may charge you $10 to $15 every month, if you have not used their credit card after a certain period time.
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Fees for Transferring Balances: Credit card companies may offer 0% financing for balance transfers. However, individuals may not realize that they are being charged a 5% just to transfer the debt. This could end up being quite costly. Again, this information may be found in the small print but may be written in legalese or in such a way that it's difficult to understand the terms and conditions
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