Protect Yourself From Credit Card Unfair Practices

Unfair credit card practices: U

Unfair credit card practices: U. S. consumers owe billions in credit card debt and the dilemma of paying for these debts have increased over the past couple of years. Unfair credit card lending practices have added to these record levels of debt. Due to unfair credit card practices Credit card companies have the power to change the rules - and we are paying the price. Credit companies can raise your interest rate any time and for any reason, and often do so if you're late paying a completely unrelated bill, like a student loan, heating bill, or medical payment. This is known as universal default.

Late fees:Did you know that the average late fee is now $35 and that it can trigger a substantial hike in your interest rate? Even more deceiving is the retroactive submission of interest rates, where your new, higher rate gets applied to your entire existing balance so that you end up paying more for something you bought months ago.

Duration of penalty interest rates:The unlimited size and duration of penalty interest rates is a long-term problem for consumers. The Federal Reserve noted in the proposed rule that penalty rates can be more than twice as much as the consumers normal rateand may apply to all of the balances on the consumers account for several months or longer.

Over limit fees:reports have been made that there are times when a payment or fee for instance: - Finance charge or credit hold puts the account over the credit limit and results in over limit fees. It is the issuers own fee, not the users credit transactions, which causes the account to go over the limit. In certain circumstances the fee trigger is a penalty fee, such as a late payment fee. Nonaligned fee, such as annual service fee, maintenance fee or finance charge can also push an account over the limit. In these cases, the issuer is effectively penalizing the customer twice for one incident.

APR increase:Credit card issuers can raise interest rates on existing balances only If the minimum payment is not received within 30 days after the due date and this the main reason why borrowers being suffered from excessive debt burden. The card issuer can set more than one rate at the time the card is opened, if it tells the cardholder what the new rate will be and when it will start. For example, the card could offer 3% for the first six months and then 12% after that. The rate increase is under a variable interest rate and following the variable rate formula for that card. Credit card issuers can raise the rate on future purchases for any of these reasons. Credit cards have become an indispensable item nowadays.

Those who hold credit cards have a responsibility to Use their cards wisely and repay their debts without delay. There is no reason for being treated in such an unjust manner and, if youre a customer in good status, theres absolutely no reason why a card issuer should be justified in jacking your interest rates up.Credit card companies can be very slippery. They have all kinds of tricks to gouge your wallet and drive up your bill. While arguably unfair, all these tricks are legal, leaving you no alternative but to stay as informed as possible to protect yourself.

by: shaunnichols

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