In light of the new consumer bill of rights floating around Congress as of yesterday, I thought it would be a good idea to talk about some of the more sneaky practices credit card companies resort to. We all know the dangers of credit card fees and what happens when the bill is late. But, what are some of the things credit card companies do that are REALLY sneaky? This, folks, is why we need the “credit cardholders’ bill of rights!”

Number 8 – Traveling abroad can cost more than you think!

In addition to the fact that Visa and MasterCard charge a 1% currency exchange fee for using a credit card overseas, some of the major banks are charging an additional fee upwards of 2%. After a vacation abroad, you may find you spent more than you intended and have nothing to show for it.

Number 7 – Credit Card Theft Insurance

Credit card companies like to sell this insurance so that consumers aren’t liable for any fraudulent charges. Thanks, but no thanks! With many credit card companies you aren’t liable anyway and if you are, it’s not more than $50 – you’ll spend way more than that if you buy their insurance.

Number 6 – The Dreaded Universal Clause

Running a little late on that cell phone bill? What about your car payment? Well, guess what, if you’re credit card company has a universal clause being late on any of the aforementioned items could cause your interest rate to sky rocket. In addition, if you’re late on any of your other credit cards, the same thing could happen. Pretty sneaky if you ask me!

Number 5 – We’re increasing your rate…for “no reason”

It’s it in the contract, fine print about mid way down. Go ahead and read it, I’ll wait.

I ran into this myself just recently. There wasn’t any reason for my rate to jump as high as it did. When I called to ask for my original lower rate, they said they were disinclined to acquiesce my request (ok, they just said no, but this sounded more dramatic!). Apparently, the increase was relative to the market changes.

Hogwash! It’s a sneaky credit card practice!

Number 4 – It’s not really a fixed rate…

If your credit card company told you that you have a fixed rate, don’t believe a word of it! A true fixed rate stays the same for the life of the loan and that’s why credit cards are not fixed – they are revolving for a reason…mostly because the rates can go up. If you get a so-called fixed rate, it just means that your credit card company is required to give you a 15-day notice before raising your rate. You can always call and ask them to lower your rate, but they don’t have to and the likelihood is they won’t – but there’s no harm in trying.

Number 3 – Oops! We’re sorry, but our address has changed…

Credit card companies frequently change their post office boxes for various reasons that may be perfectly legit. However, this practice becomes sneaky because they don’t inform their customers of the change. If a customer mails a check or uses online bill pay and it goes to an old address, there could be a delay in posting your payment. Guess what that means? You got it…LATE FEE! Wasn’t your fault, but try telling them that. Sneaky, sneaky!

Number 2 – Time’s Up, You’re Late

Huh?

All credit card companies have a due date, but some go a step further and give you a specific time of the day to have the payment in by. Let’s say XYZ credit card company says your bill is due by the 15th, no later than 3 pm EST. If that payment is even two minutes late, you’ve now assessed a late fee, possibly lost your introductory interest rate, and may have incurred other fees depending on your card usage. BUT, you won’t find the time on the front page of your statement with the DUE DATE. Nope, they put it in the fine print on the back.

And, if you call in and complain enough they may take off the late fee, but increase your interest rate. Watch for this very carefully because it can cost you money and possibly some sanity.

Number 1 – Bait…and Switch

This is a classic maneuver, but one that is effective for credit card companies. They get a consumer hooked on a card – usually through the pre-offer they got in the mail. They’ll get all of these frequent flyer miles if they do balance transfers and use a certain amount in purchases each month, etc. So, the unsuspecting consumer sends off for the card and is overjoyed when it is returned. They activate the card and start using it right away. Imagine their surprise when they get their statement and there are no frequent flyer miles, no points accumulated, nothing they were promised.

In reality, the consumer probably didn’t qualify for the uber-premium card that had all of those rewards on them so the credit card company just sent them what they did qualify for. There’s usually not a form letter stating that they didn’t qualify for the one they applied for, but here’s a nice consolation prize…that wouldn’t get credit cards into the hands of consumers. Instead, they send the nifty little package with the card, terms and conditions, etc. The information letting the consumer know that it’s not the card they originally applied for is in the packet – fine print, fee schedule, etc. – but most people don’t double check that once they’ve read over the information for the one they wanted.

Always, always double check your credit card package when you get it in the mail. If it is not the one that you wanted, call them immediately and find out if there has been a mistake. If not, close the account and move on.

There you have it. Credit card companies are sneaky, plain and simple. They balk at the new proposed legislation because they know what it will mean to their business. Let’s face it, they make their money off of interest and fee income – reduce that and it hits their bottom line. Of course they don’t want this bill to pass! In the meantime, protect yourself against these types of tricks. Watch your bill carefully and pay your debt in full every month if at all possible.

Related posts:

1. Watch Your Back: 8 Up and Coming Credit Card Fee-Creep Tricks
2. Five “Convenient” Services Offered by Your Credit Card Company That You Should Think Twice Before Accepting
3. Sneaky Ways to Save Money
4. Top 10 Worst Credit Card Practices
5. 5 Tricks That Make Your Credit Card ‘Readable’