Stupid Credit Card Tricks
You Don't Have to be Gouged
By Daniel Muniz
Buried in the fine print of your credit card
agreement are the instruments to inflict pain to your pocketbook.
And pain is what you will feel if your credit card payment is a day
or even an hour late. Not only can you get slapped with an
outrageous fee, but your interest rates could also skyrocket.
Over-limit fees, hidden fees and other
concealed costs do add up over the course of time. Some lenders
charge different rates for different balances. And teaser rates and
zero-interest programs are the biggest bombs a creditor can throw at
you if you violate an agreement.
According to certain statistics, fees have
become a significant moneymaker for credit card companies. In fact,
for some credit card issuers, these charges account for about a third of
their profits. And it is easy money when it comes to generating
income from fees when lenders employ stupid credit card tricks.
In the past, you used to have a grace period
of the due date for your payment. Not any more with most credit card
issuers. Some unscrupulous creditors habitually changes the address
of their payment lock box so that they can slap unaware customers
with more fees when they payment is sent to the wrong place and
becomes late.
And suppose you do make every payment on time
along with a lengthy credit history with your lender, your interest
rates can still soar into the stratosphere or even be closed.
The irony is that you could be doing
everything right with your credit card company but still get gouged
with outrageous interest rates.
Just last year I got a letter stating that my
Best Buy account was being closed. My Best Buy department credit
card had been open for a number of years and I never missed a
payment. I knew I had a good credit history with them and even the
customer service representative agreed that according to their
records, I was an outstanding customer.
However, just prior to that particular time I
had purchased my first house. And as any first time homeowner knows,
everybody and their grandmother wants to check your credit,
including the cable and phone company. Even the security alarm
monitoring system I just subscribed to wanted to check my credit.
And as a first time homeowner, I had to
finance so many new hidden expenses that came along with home
ownership. As a result, my credit report was loaded with inquiries,
new accounts, maximized utilization, and now a sorry debt ratio
because of my mortgage.
With soaring bankruptcies, many lenders are
now on the lookout for anybody standing on the abyss of debt. In
addition to your own account history, these outfits routinely
monitor your activity with your other trade lines. It no longer
matters how good your credit history is with your credit card issuer
because they are constantly analyzing your behavior with all of your
other lenders.
Even if you have a perfect payment history,
overextending your utilization and credit mix can have severe
consequences.
But you can fight back!
If a lender tacks on an outrageous fee, call
them up.
Many outfits have a once a year courtesy of
removing a fee. In the course of several years, all it took
was a phone call from me to have a few outrageous fees removed. Many
creditors have such contingencies if a customer becomes irate.
If a lender jacks up your interest, call them
up.
When I was first building up my credit, the
only creditors I could find were the credit card issuers with high
interest rates. I knew I needed credit in order to establish credit
so I continued doing business with these sharks for a few years.
Afterwards, when I was able to obtain better financing through other
lenders, I called up my high interest credit card company and told
them that I was tired of their unreasonable rates and that I wanted
to close my account.
Again, this creditor had a contingency plan
for people like me. They immediately offered me a dramatically lower
interest rate with lower fees. Naturally, I accepted but mostly for
the reason to pay off that balance at a lower rate. I had no desire
to continue doing business with an outfit that was determined to
gouge me any way it could, which leads up to the next option.
Change to different credit card issuers.
Much like everybody else who started off with
no credit, I had to go to the lenders who offered credit to
sub-prime customers. I really didn’t have a choice but to go along
with the high interest rates, the outrageous fees, and the stupid
credit card tricks.
But as time passed and my credit rating
improved, I knew I had choices. I went from having accounts with the
big national (and sub-prime) credit card companies to my local
credit unions. The smaller lenders had very good interest rates,
reasonable fees, and they didn’t employ the nasty surprises that the
other issuer gouged me with. And I got good customer service.
In fact, the number of people I know who have
very good credit but still stick with companies who constantly pull
shenanigans always surprises me. Sometimes change is hard but it is
definitely for the better.
The competition is fierce especially when your
credit improves. There is no reason for you to be continually gouged
by predatory credit card issuers when there are still plenty of good
outfits who are willing to offer good rates and excellent deals.
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