Thoughts and Riches

.....a blog about personal finance, motivational stories, deals, and special offers

Books

Web Domain Registration

Tuesday, March 13, 2007

Working 6+ hours to pay credit card penalties

Recently, a reader sent me a link to an interesting article on the shady tactics increasingly used by credit card companies these days. Some of the tactics used by credit card companies include:

- Using hard to understand credit card disclosure statements and agreements
- Charging high credit card fees and interest rates
- Charging high penalties
- Changing due date
- Not mailing out statements
- High balance transfer fees
- Charging inactivity fee for not using accounts

What's surprisingly is that not only smaller credit card companies are embracing these tactics but some of the bigger and well-known are doing it as well. I myself have been fallen for some of the gimmicks. I ended up using the checks in my statement that supposedly had zero balance transfer fee but ending up paying a fee on them. Fortunately, that was a lesson well learnt but the sad thing about the tactics used by credit card companies is that they hit poor and the uninformed people the most. For example, many issuers charge a late fee penalty of $30 or above. For some one who's making the current minimum wage of $5.15/hr, that means almost 6 hours of work to pay just the late fee penalty, and this does not consider the other interest charges that person may be paying on the credit card charges, as well as his/her after tax income.

As always, the best thing to do is to be aware of these tactics and take steps to avoid incurring late fee penalty and other charges in the first place. For eg, I try to pay the minimum payment amount a few days ahead of the deadline, to ensure at least I am not hit with late fee penalty. The remaining portion of the balance I try to pay by the deadline.

For complete article, check out the following link:

Shady Credit Card Tactics

Fortunately, Congress is currently reviewing the credit card industries practices. In addition, CNNMoney.com recently published an article on how to avoid some of these charges.

CNNMoney.com - Sidestep credit card fees

posted by Ruby @ 6:08 AM

0 Comments:

Post a Comment

<< Home

See important Disclosure and Disclaimer

Favorite Quote

"If you look at what you have in life, you will always have more. If you look at what you do not have in life, you will never have enough".
- Author Unknown

Disclosure

This site uses cookies from companies like Google and others to enable the companies to deliver their services, personalize their ads and product offerings, and for traffic analysis. Information about your use of this site is shared with these companies. By using this site, you agree to its use of cookies. Additionally, this site, including blog posts, may contain reviews, links, banners, text and other forms of advertisements for products, services, courses, and so forth of companies of which we may be an affiliate member or for which we may get paid for referrals. This site may also contain blog posts for which we are paid, as well as blog posts regarding products or services of companies from which we may have received complimentary products or services.

Reward Surveys/Panels/Shopping/Contests