Credit Cards Gotchas
Debt counselors are now getting calls from confused and desperate consumers spouting interest rates of 27% to 33% who are looking for credit card debt help.
Late fees make up nearly 70% of the 17.1 billion dollars in fees collected by credit card issuers. Many credit card companies are located in states that have no limits on interest rates and fees. Numerous banks are demanding $39 late fees, fees for same-day payment, payments made by phone, and for usage overseas, and the kicker is, that instead of declining a transaction that will put you over your credit card limit, they approve it and smack you with a “courtesy” fee. Yes, thank you very much.
There is no end to the sneaky methods credit card issuers will utilize to entice you to spend more money. Believe it or not, one-third more people increase the amount they charge if the purchase doesn’t require a signature. This is according to a MasterCard study. By not requiring a signature for charges of $25 or less, consumers are reaching for their credit cards instead of paying with cash. And because your credit card is so handy why not add a few extra things to the bill; it’s not even $25, right? Before you know it those small charges will add up.
Remember when earning rewards was a great way to receive cash back or airline miles? In 2006, American Express removed its double points reward system for everyday purchases on their credit card. And Citibank reduced its cash back on purchases from 5% to 2%. All in all, consumers need to be vigilant and careful with their credit card spending and they must read notices and bills so they don’t end up with a “gotcha!”
For more information, visit consolidatecredit.org.