September 19, 2017
 
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Credit Card Tricks: Little known ways they try to rip you off

Not reading the fine print is something we’re all guilty of doing. But when it comes to credit card offers, it pays to inform yourself because what you can end up with can cost you a bundle.  Once you sign up and activate the card the power play begins. There are all sorts of sneaky tactics credit card companies legally employ to come between you and your wallet. One such tactic they typically monkey around with is fees—all shapes and sizes, the obvious and the not so obvious. Let’s take a closer look at annual fees.

Annual Fees

Many consumers are already familiar with the “No Annual Fee” promotions that many credit card companies offer. It’s pretty standard nowadays and it definitely motivates us to consider applying for a new card or responding to an offer you receive in the mail, especially if you’re current card charges you an annual fee. The annual fee is a fixed charge that you pay for the privilege of using their card and earning them money. Many companies justify the annual fee because they offer various reward programs such as airline miles, gift cards, car programs, etc. Annual fees can get pretty pricey, depending on the card. A quick online search yielded fees ranging from $27 to $109, and even up to $169 for business cards. No matter what perks they offer, find a card with no annual fee. There are plenty out there to choose from. The problem is when they try to sneak it by you.

 

Surprise, surprise

You thought you had signed up for a card with no annual fee, but all of a sudden, there it is! The nerve! Most likely, in the fine print on the back of the credit application, there was a statement regarding an annual fee after a certain time period or a general catch-all phrase that they have the right to change the terms at any time. Some customers who pay their bill in full each month get smacked with this fee. Or worse, if you responded to a pre-approved offer in the mail, stating “no annual fee”, you may have actually been sent a card with less favorable terms after they had the opportunity to review your credit report. Chances are they provided you with the information, but it’s a matter of going through it and knowing what to look for. Unfortunately, they’ve come to rely on sneaky marketing techniques.

What you can do

Review the terms of your card on the application and become familiar with the back of your statements where there is information regarding payments, finance charges, APR, etc. Always look over and read everything on your statements for accuracy as soon as they arrive in the mail. Make sure your due date is the same and your previous payment was received. If there is an annual fee that you weren’t expecting, call the company immediately. You may have to wait on hold, and it can really be frustrating, but be persistent and nice. Ask them to reverse the charges or you’ll go to a different company. If they won’t budge, the best recourse is to cancel the card.

The Fair Credit and Charge Card Disclosure Act requires credit and charge card issuers to include a table disclosing the following items: annual percentage rate, the regular rate if there is a discounted introductory rate, how variable rates are determined, the annual fee, the minimum finance charge, transaction charges associated with the use of the card, the grace period, how finance charges will be calculated, and any other fees. Also, the law requires card issuers to give consumers this disclosure with renewal notices if an annual fee is charged.

 

 

 

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