Thursday, April 05, 2007

Credit Card Dirty Tricks

There are many of us that have got got been badly stung by credit card companies that have charged extortionate fees to utilize their credit cards. Respective old age ago an APR of 25% to 29% was common topographic point which in simple terms intends that if you borrow £1,000 your interest on that money would be £250 to £290 a year. Criminal when you believe of it but I say we have got got to see interest rates were much higher 8 to 10 old age ago and there were fewer credit card companies on the market.

Today the low interest rates that we are experiencing have spurned 100s of loan and credit card companies cashing in on the cheap cost of borrowing. To get approved for a loan or a credit card nowadays have never been easier. With the coming of the internet you can get approved for a loan or credit card in 10 minutes. So we all have got a few 0%, low interest rate credit cards in our bags and wallets but allows happen out a spot more about the sting in the tail of these cards.

1. Monthly Repayments:
Well done if you pay your measure off each calendar month in full. Like most of us we only pay off the minimum monthly repayment; this is usually a % of the outstanding balance or no less that £5. Some credit cards will put the minimum repayment on a card at such as a low amount that you inevitably stop up paying the interest and nil else. When this haps you stop up with a chemical compound interest scenario. Beware you could stop up paying off a £2,000 loan for the adjacent 20 years.

2. Credit Card repayment protection (CCRP):
Credit Card companies do a just amount of money out of you when you utilize their cards. But wait they desire to do some more. Just in lawsuit you decease or lose your occupation they will offer you Credit Card protection for a monthly fee. These are usually over priced. Most credit card companies do a luck out of these policies as most people don’t understand how these fees are calculated so don’t cognize there true worth. What most people are buying is the piece of mind.

3. Punishment fees:
If you make not pay on clip you will be charged a late payment fine. These change depending on your credit card company. The best manner to forestall this occurrence is to put up a direct debit. You get charged for exceeding your credit limit. Again this is a very underhand manner for the credit card companies to do money off of us. Most of us will steal up without even knowing it and a charge of £25 can quite easily travel unnoticed on our statements. Be diligent and don’t give the card companies any alibi to do these charges.

4. Protection Plans:
This is another juicy money shaper for the card companies. For an annual fee you will get protection on your card in the event of them being stolen, lost or used fraudulently. Most credit card companies usually don’t charge for this and will return you the money for any fraudulent transactions. I wouldn’t suggest getting this.

5. Credit Limit increase:
You had a credit bounds of £3,000 and have got got been diligently paying off your card every calendar month and all of a sudden your new credit card statement states you have a credit bounds of £10,000. You probably didn’t inquire for the addition but hey they gave it to you anyway. Psychologically this do you believe you have got more than than money to pass but it is in fact a underhand manner of getting you to pass more money on your card. If you don’t need it inquire your credit card company to take the new limit.

6. Foreign transaction charges
It is usually quite convenient to utilize your credit card abroad on holiday or on a business trip. No need to carry large sums of money of foreign currency around with you. But wait for it …….. You will be charge for this privilege (not surprised I am sure). You will be charged a committee depending on the amount you pass abroad which can change from 3% to 5%.

7. Cash backdown charges:
Not much new here. If you retreat money from a cash point using your credit card you will be charged for the privilege. Remember nil steals through. Card companies can charge in the part 3% of the amount drawn and the bad intelligence as if this isn’t bad enough, you won’t benefit from any promotional 0% introductory offers that are currently running on your card.

As you can see credit card companies do money from us in more than ways than we in most cases are aware of. Be smart and retrieve all these important facets when using your credit card. You may be one of the few that bounds the credit card companies from lone making the bare minimum from you.

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