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In order to catch credit card secret fees and hidden costs, you need to understand how credit card companies make money and what they do in order to clear profit.
Many of the policies credit card companies implement are designed simply to increase their profits and are a distinct detriment to the consumers that are their customers.
Credit Card Companies Penalize Smart Consumers
If you are one of the consumers who use credit cards for convenience and pay the balance off in full each month, you might think you are a favorite customer for the credit card company.
Nothing is further from the truth. Actually, credit card companies call you a “deadbeat” and will look for ways to charge you money and may cancel your card if times get tough.
Jumping Interest Fees
One of the favorite tactics of the credit card secret fee industry is the jumping interest rate.
Credit card companies use a variety of means to increase the rate. One is to lure a new consumer into opening a card by dangling a low introductory rate. Then once the introductory period is over, they impose interest rates of 20 percent or more.
Many consumers assume that they will get a normal rate in the 10 to 15 percent range, and never read the small print disclosing the higher rate.
Another tactic used by the credit card companies is to offer a low rate on a balance transfer, but retain the option of jumping the rate if you are late by even a day on the payment. While some companies give you up to two late payments before they impose the high rates, more and more companies are immediately imposing 25 to 28 percent interest after a single late or missed payment.
Over Limit and Late Fees
Because there is no legal limitation on the fees a credit card company can charge, many of them charge very high fees for such routine policy violations as over limit charges and over limit fees.
These exorbitant fees, sometimes as high as $50 and routinely $40 per incident, are charged for one single violation – a payment that is posted a few hours late or a day late, or a few dollars charge over the limit.
Companies often lower credit limits with no warning, and the consumer may inadvertently incur multiple over limit charges without realizing their credit limit was lowered.
Holiday and Weekend Due Dates
The payment you make to the credit card company is not credited on the day it arrives in the company’s mailbox; it’s not credited until the credit card company physically posts it.
Therefore, if your payment is due on a holiday or weekend and it arrives on that day, it does not get credited until the next week or day. This means a late fee and often an interest rate hike for you.
The only way to avoid this is to make payments early or use online payments that are posted the day or two before the weekend or holiday due date.
Loans from Other Companies
While it seems unfair, credit card companies will raise your rates if you get a loan from another creditor if it makes your total debt burden higher than the credit bureaus and your credit card company deem wise. You could be hit with fees and a cancelled card for credit behavior that doesn’t have anything to do with that card.
Catching Credit Card Secret Fees And Hidden Costs
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