Credit Card Dirty Tricks

There are many of us that have been badly stung by credit card companies that have charged exorbitant fees to use their credit cards. Several years ago an APR of 25% to 29% was common place which in simple terms means that if you borrow £1,000 your interest on that money would be £250 to £290 a year. Criminal when you think of it but I suppose we have to consider interest rates were much higher 8 to 10 years ago and there were fewer credit card companies on the market.

Today the low interest rates that we are experiencing have spurned hundreds 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 has never been easier. With the advent of the internet you can get approved for a loan or credit card in 10 minutes. So we all have a few 0%, low interest rate credit cards in our bags and wallets but lets find out a bit more about the sting in the tail of these cards.

1. Monthly Repayments:
Well done if you pay your bill off each 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 set the minimum repayment on a card at such a low amount that you inevitably end up paying the interest and nothing else. When this happens you end up with a compound interest scenario. Beware you could end up paying off a £2,000 loan for the next 20 years.

2. Credit Card repayment protection (CCRP):
Credit Card companies make a fair amount of money out of you when you use their cards. But wait they want to make some more. Just in case you die or lose your job they will offer you Credit Card protection for a monthly fee. These are usually over priced. Most credit card companies make a fortune out of these policies as most people don't understand how these fees are calculated so don't know there true worth. What most people are buying is the piece of mind.

3. Penalty fees:
If you do not pay on time you will be charged a late payment fine. These vary depending on your credit card company. The best way to prevent this happening is to set up a direct debit. You get charged for exceeding your credit limit. Again this is a very sneaky way for the credit card companies to make money off of us. Most of us will slip up without even knowing it and a charge of £25 can quite easily go unnoticed on our statements. Be diligent and don't give the card companies any excuse to make these charges.

4. Protection Plans:
This is another juicy money maker 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 refund you the money for any fraudulent transactions. I wouldn't suggest getting this.

5. Credit Limit increase:
You had a credit limit of £3,000 and have been diligently paying off your card every month and all of a sudden your new credit card statement says you have a credit limit of £10,000. You probably didn't ask for the increase but hey they gave it to you anyway. Psychologically this makes you think you have more money to spend but it is in fact a sneaky way of getting you to spend more money on your card. If you don't need it ask your credit card company to remove the new limit.

6. Foreign transaction charges It is usually quite convenient to use your credit card abroad on holiday or on a business trip. No need to carry large sums 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 commission depending on the amount you spend abroad which can vary from 3% to 5%.

7. Cash withdrawal charges: Not much new here. If you withdraw money from a cash point using your credit card you will be charged for the privilege. Remember nothing slips through. Card companies can charge in the region 3% of the amount drawn and the bad news 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 make money from us in more ways than we in most cases are aware of. Be smart and remember all these crucial aspects when using your credit card. You may be one of the few that limits the credit card companies from only making the bare minimum from you.

Grant Marwick is a freelance writer and owner of http://www.only-credit-cards.co.uk where you will find advice and more articles on Low interest Credit Cards and 0% Credit Cards

---

Building Your Credit History

Today, credit is an indispensable part of our lives. In... Read More

New Credit Advice: Dont Pay off Those Credit Cards!

Credit needed for real estate mortgage financing differs from credit... Read More

Five Credit Card Billing Problems and How to Fix Them

It goes without saying that your first and best defense... Read More

Avoiding ID Theft and Credit Fraud

Article excerpted from the new book, "How to Do Space... Read More

The Exact Action To Take When You Find Errors In Your Credit Report

There are times when you may be turned down for... Read More

Negotiating Rates with Your Credit Card Company

Ok, let's face it, everybody hates high credit card rates,... Read More

Credit and Banking Money Saving Services

The first rule when applying for banking and credit services... Read More

Dont Fall For A Scheme When Trying To Rebuild Your Credit History

For people with a spotty credit history or bad credit,... Read More

How To Prevent Fraudulent Credit Card Transactions

What Are Possible Signs of Fraudulent Transactions see at Web... Read More

SuperCharged Secret 3, Credit Card Utopia

TURBO-CHARGED KILLER RATE SAVING INFORMATION!Let's just take a brief moment... Read More

4 Steps to Creating Good Credit

As a consumer you've learned the importance of establishing a... Read More

Types of Credit Cards

There are a whole variety of different types of credit... Read More

Why Should You Use Credit Cards

Believe it or not, the way society, especially the commercial... Read More

Credit Card Is Adding The Silver Lining To Your Pocket

In the new millennium plastic money or credit cards has... Read More

Saving Money with Credit Cards

Having a credit card is a wonderful convenience for those... Read More

Identity Theft ? Monitor Your Credit Report

The recent security breach at credit card processor CardSystems Solutions... Read More

Myths and Truth about Credit Scoring

Credit score is the key factor determining approval of almost... Read More

Choosing a Credit Counseling Company

If you have considered credit counseling as an option to... Read More

Identity Theft - Dont Think You Are Immune

As identity theft becomes more prevalent, the need to regularly... Read More

5 Killer Steps to avoid Credit Card SCAMS!

In August, 2004, the Federal Trade Commission issued their findings... Read More

Bad Credit Loans For Those Who Seek Alternatives for New or Old Car

You can still save money on a Bad Credit Loan... Read More

What Happens When Your Credit Is Damaged? Do You Have Recourse?

The good thing about bad credit is that you can... Read More

Free Credit Reports Now Available From the FTC

The Federal Trade Commission (FTC) has set up a new... Read More

Improving Your Credit Report

Even if you think you have a wonderful credit report,... Read More

Figuring Out the Ever Nebulous Numbers Called Credit Scores

Credit Score FactorsThe information contained on our credit reports affect... Read More

Our World Of Credit Cards! Which One Is Right For You

There are not many of us who do not have... Read More

Recognizing the Signs that You Might Need Credit Counseling

Most families in America today have a credit card; some... Read More

SuperCharged Secret 2, Credit Card Utopia

INTEREST BEWARE, THERE'S SAFETY IN NUMBERS!Note: The following is part... Read More

Tips For Getting Your First Credit Card

Most of us get a credit card on our name... Read More

The Top 5 Secrets to Managing Your Credit Cards?So They Won?t Manage You

You've probably never heard of Frank X. McNamara, but he... Read More

Lower Your Credit Card Interest Rate Now!

With today's credit card companies, there are many opportunities to... Read More

How To Choose A Credit Card

Your credit score may just be a little number, but... Read More

Free Credit Report - Really

2005 marks the year that consumers will be able to... Read More