What Your Bank Won’t Tell You About Your Credit Card


Authored by Lori Godin in Credit Card 
Published on 01-05-2009

Banks accrue billions of dollars in revenue each year from interest rates and finance charges accumulated on credit card accounts. To ensure that your card is contributing as little as possible to this number, follow these tips to avoid the charges. These fees your bank won’t tell you about are surprisingly unavoidable.

Your bank is waiting for you to make one mistake. When you make the first mistake, such as a late or missed payment the bank is liable to increase the interest rates associated with your account. Interest rates can be changed on short notice, according to drops in the credit rating or a change in payment history.

Banks prey on those new credit customers. College students are some of the first people that banks issue credit cards to, regardless of the lack of credit that is associated with these students. Protecting your child’s information by ensuring that credit card offers are not completed until the child is responsible and aware of the implications that come with the use of credit.

Rewards are never free. Even the rewards that come as a sign-up bonus. A bank is never going to lose money through the credit card process and therefore it is important to pay for purchases within the grace period. Banks are aware that the majority of customers are not going to pay for purchases within the grace period, therefore they are accumulating money in finance charges and interests, which will tally up to be more than the rewards that are going to be redeemed through the program.

Credit card exchange rates are some of the highest available. Combine this with the fact that most credit cards implement a 3% fee of the amount that is being charged to the card, if the amount is in a different currency. You are better off to use cash, or your debit card to fund the purchase. Paying in another currency through a credit card can leave the customer susceptible to some of the highest market foreign exchange rates.

On the one day that payments are due each month to the credit card company, this is the day that the company decides to close early. Closing early can cause thousands of customers to miss the deadline, implementing late charges to the thousands of these customers. Customers are appalled to find out that some credit card companies have implemented deadlines on the payment due date early in the hours of the morning, before the customer has the chance to make a payment.

Banks live for the amount that is charged when customers go over their credit limit. Go ahead, go over the limit, use fees accumulated to go over the limit – we will charge you either way says popular credit card companies.


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