Because of credit reform, credit card offers are a lot more deceptive

Credit card reform does not mean consumers can relax and feel safe. Now individuals have to be wary more than they ever have before. The credit card reform act of 2009 is cutting into some of the a lot more underhanded credit card scams from numerous of the financial institutions. So now those establishments are trying much harder to sign people up for credit card debt than they ever have. And they’re looking for a lot more methods to make money with new fees and higher late fees. Credit card users have to read the fine print on their applications and read statements cautiously when they go to receive them.

Article Resource: With credit reform, credit card offers are getting more deceptive

Credit card offers

Credit card companies are hard to control. Even with a terrible economy, the credit card reform act of 2009 has credit card business marketing efforts going crazy. Synovate Mail Monitor reports that credit card spiels to U.S. households increased 29 percent during the first quarter of 2010. Some of the companies have doubled their efforts. Some of the largest ones are just predatory in the fees they come up with to charge customers a lot more.

Credit card scams

There are numerous creative credit card scams. Many say they price late fees for risk. But a new report from the Center for Responsible Lending shows that late fees have nothing to do with the credit card company’s potential loss. As outlined by the report, late fees aren’t pegged to the risk a borrower might default on their credit card debt. Instead, nine of the top 10 characteristics of credit card companies who charge high late fees are deceptive practices. One of these is paying a higher interest rate if there is a late fee. Another tactic is to set the payment deadline for early morning on the due date.

Credit card late fees and even a lot more than that

Just the beginning are credit card late fees. USA Today reports that other tricks to look at out for contain balance transfer fees, shorter introductory offer periods, and the fine print about annual fees on rewards cards.

Balance-transfer fees: Credit card companies offer percent introductory rates to transfer balances to a new card. The amount transferred is being charged around 5% with no cap. It could cost $ 1,000 to transfer $ 20,000.

There's also shorter introductory offers: Some credit card companies offer percent interest for up to 18 months, but a six months is becoming much a lot more common. The credit card reform bill will not allow credit card companies from offering introductory rates for under six months. Card holders must be realistic about whether they can pay down the balance before the offer expires. Any late payments will prompt the business to cancel the introductory rate.

Last there are annual fees: More rewards cards are coming with annual fees, especially airline credit cards. When using these companies, calculations can be a lot more difficult. The fee may be worth the ticket unless it takes you years to get it. No average traveler will get enough points. Then you will find the rewards cards that withhold rewards because of a late payment and demand a reinstatement fee to reclaim the rewards.

Credit cards make anything cost more

Credit card offers are exploding because of the credit card reform act of 2009. But an unhealthy economy and credit card debt are a bad mix. As outlined by Smartmoney.com, when the economy is struggling, the value of goods and services falls relative to the value of money. Individuals with many debt are put between a rock and a hard place. As the price of anything falls, so does their value. When a product is charged on a credit card, the ultimate price paid for it rises as the product loses value, and that does not contain interest.

Citations

Center for Responsible Lending

responsiblelending.org/credit-cards/research-analysis/a-just-fee-or-just-a-fee.html

USA Today

usatoday.com/money/perfi/columnist/block/2010-06-01-yourmoney01_ST_N.htm

Smartmoney.com

smartmoney.com/Personal-Finance/Debt/carry-credit-card-debt-watch-the-dollar/