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Misleading Gas Credit Cards The commercials say if you use their credit cards to buy gasoline you will immediately save 5 percent on the price at the pump. With today's prices the savings could mean a lot. Five percent on a $30 fill-up would be $1.50. But lets read the small print. The MBA credit card company does not want you to use their card just to buy gasoline, so to get the 5% discount you must always spend at least $150 a month on the card for other items plus the gas. NO, you don't hear that in the commercial. I guess that they just didn't have time for that fact. Also, if you do not pay in 30 days you have a 12% late fee which costs you 7% and wipes out the 5% savings at the pump. Plus most cards have a yearly fee. So, if you are late five months out of the year, and pay a yearly fee you will wipe out all of your five percent savings for the entire year, not to mention that they will increase your yearly interest rate because you were late. This does not include the cost of hiring a CPA to figure all this out. A CPA at $250 per hour, it would be cheaper to pay cash for your gas. What would Jessie James call this? "Highway Robbery." But Jessie James couldn't qualify for most credit cards because of his profession; he was a well-known Train Robber. And as you know there is "no trust among thieves." Am I calling credit companies thieves?? Well now that I think about it, I am not sure. Filed October 10, 2005 Credit Card Dirty Tricks Credit Card companies are always looking for new ways to charge you fees or raise your interest rate. These companies want to squeeze you for every dime, or even nickel that they can. Some of the major credit card companies were caught holding up the payments by mail when then came into their office. A whistle blower employee told authorities that employees were told not to open the mail until after the payment due date, that way the credit card company could charge each card holder a late fee and then raise the interest rate because they were late. This is a criminal action. Banking regulators did not shut down the credit card operations but just slapped their wrists. Now credit card companies have five "dirty little tricks" that they use to take money out of your pocket. 1) Creditors have ways to increase your interest rate on your credit card. They use a system called "universal default" to raise your rate. If the creditors can find that you were late on any payment or went over your limit on any credit card or have too many cards, they will bump up your rate. Some credit card companies will even raise your interest rate if you have inquires about a mortgage or a car loan. 2) The next "little dirty trick" is the use of a "Two-Cycle" billing system. This system is a little complicated but it will cost you money. Example: Lets say you do not have any purchases in August, but in September you buy something on your credit card on the 10th day of September. Some credit card companies will hit you with the "Two-Cycle" billing system and charge you interest on the purchase in August and September, even though you bought it in the middle of September. 3) Banking regulators are now requiring credit card companies to increase the minimum monthly payments so more people will be able to pay off the balances and not go bankrupt. But that means less interest on lower balances. So the creditors will start searching for new fees to make up the loss. Some minimums payments will double. 4) In the past Banks would charge 1% for overseas transactions. This charge covered the Visa and Master Charge fee to the banks. But now, many of the major banks are doubling that charge to 2% for no major reason but to make more money. Even if you made all your payments overseas in US dollars and do not convert your dollars to a foreign currency the banks will still charge you the 2%. 5) The last "dirty little trick" is when banks charge you a fee on your credit card when you do NOT use it. That's right if you don't use the bank's credit card they will come up with a non-use fee. I am waiting for the "Deadman's Fee," that would be when the card holder died and the bank charges him or her a fee because they will not continue using their credit card. I suggest that you e-mail your Representative in Congress and tell him or her that you are fed up with all the tricks the banks are allowed to to use to get more money out of your credit card. Remind them that they passed a bankruptcy bill that totally favors the banks and credit card companies over the consumer. Now lets have some laws that protect the consumer from the tricks of the credit card companies. Some of the information in this report came from SmartMoney.com Filed August 2005. Warning: Credit Card Rip Offs in the Mail The U.S. Mail in being flooded with Credit Card Applications for Gold and Platinum Credit Cards. The deals and interest rates sound outstanding. But these applications are like a fancy fishing lour with lots of wiggly worms that hide the "rip-off" hooks inside. These applications always promise an extremely low interest rate, like "2%" or "0%." But you have to check the small print to find out how long this rate will last. Most are for six months or less then the rate goes up to 16 to 18 per cent interest, some even go as high as 22%. What to Look For in the Application There are normally many hidden costs or rules for these great sounding God or Platinum Credit Cards. These hidden fees or costs are normally in extremely small print on the back of the application written is gray ink that is almost the same color as the paper it is printed on. Bottom line they make it extremely hard to read. Always look for annual membership fees that can run as high as $100. Some cards have cost fees if you do not charge a certain amount on the card in a one year period. Look for late payment times and fees that can increase your long-term interest rate on the card. Some cards have rules that if your payment is late by just one day then you have to pay a late fee, plus your interest rate increases to 24% for the rest of the year or in some cases for the life of the credit card. The Federal Trade Commission has alleged that some credit card companies have purposely held payments and processed them late so that the interest rate could be increased. So even if you pay on time the credit card company would still increase your interest rate. Also look out for credit cards that inform you in the small print that the card is only good for purchases from their "Special Gold Card Catalog." What this really means is that you are paying a yearly fee to be able to buy from their catalog that has prices higher than you would find at most stores. It is a total rip-off. Why pay them a fee to buy their products at higher prices, and then pay them interest on top of that? Remember the Credit Card Industry is making about $7 to $20 Billion dollars per year. How to Get the Best Deal on a Credit Card? You are going to find the best deals on credit cards at banks or credit unions. They will always have the best interest rates and normally none of the hidden fees. Remember always negotiate for the best rate. Even if you already have the bank's card you can negotiate for a lower interest rate. The bank does not want to lose a cardholder for an interest point or two. Also if you are a good cardholder you can normally get the annual fee removed. You should not have more than two or three major credit cards. When you have too many credit cards it hurts your credit rating. The credit rating services calculate that if a person has too many credit cards then they are open to the possibility of getting into excessive debt. Don't Just Toss Out the Applications! Make sure you shred all these credit card applications. There are people who make a living out of taking your credit card applications out of your trash and selling them for $35 each to an identity theft crook. This crook then fills out your application, and changes your return address to his address, and sends it in. In a few weeks he get a "real" Gold Credit Card in your name. Now he starts buying and buying at shopping centers on your credit card. Always destroy the applications. Report filed 5/3/02 |
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