Dirty Secrets of Credit Cards

Credit card companies are completely up front about everything when it comes to their customers, right? Wrong. Well, kind of. The fact is, credit card companies do reveal all of their dirty little secrets in the fine print of a twenty page booklet. But, who really understands all of that lingo or takes the time to read it from front to cover? Now, you dont have to. Instead, you can look for a few secret words and phrases that uncover their dirty secrets once and for all.

Secret #1: Minimum Notice Changes

Many credit card companies include a minimum notice change clause in their contracts. This means they have the right to change your interest rate at any time, for any reason, as long as the holder is give 15 days notice. This means the credit card company can change your interest rate after you have already completed a purchase, and any former agreement is no longer applicable.

Secret #2: Universal Default

Credit card companies have the right to raise your interest rate if you are late on just one payment. To make it even worse, the late payment doesnt even have to be to the credit card company. Thats right. If you are late making a payment on your house, car, electric bill, phone bill, or any other bill, your credit card company can legally increase your rate to whatever rate it sees fit. And, your credit card company has the right to access your credit record any time it wants. The reason? The credit card company gets to check up on you because you are borrowing their money. In addition, if you make a late payment, the company can consider you to be a greater risk and require a higher interest rate to protect itself.

Secret #3: Fees

The US Supreme Court has effectively given credit card companies the right to decide on their own fees for late payments, over the limit fees, and bad check fees. With no limit on how much they can charge, some companies are charging outrageous fees to their customers. In addition, assessed fees can push a cardholder over his or her credit limit, which will result in more fees.

Secret #4: Usary Laws

Credit card companies are not limited by the federal government on the interest rate they can charge. Some states have caps, but others, such as South Dakota and Delaware, do not. Incredibly, some credit card companies have assessed interest rates as high as 35%. This is why many credit card companies are based in states without a cap on the interest rate.

Secret #5: Minimum Payment

It used to be that consumers had to pay a 5% of their balance as a minimum payment. Many credit card companies, however, have lowered the payment to 2%. This sneaky tactic encourages cardholders to carry balances for longer periods of time, which puts more money in the credit card companys pocket.

Secret #6: Looking for Revolvers

In the credit card industries, revolvers are the ideal cardholders. Revolvers are those that carry a balance on their card and, as a result, pay finance charges. The term deadbeat, which used to refer to someone who didnt pay his bills, is now used to describe a person who does pay his bill every month because the credit card company doesnt make any money off the customer. Which are you, a deadbeat or a revolver? Shoot for being a deadbeat and beat the credit card companies at their own game.