October 07, 2009
-
Congress Must Spank CC Industry Again, Pt.3
And the list goes on...High-interest balances which can’t be paid down: Ever notice how many innocent mailers show up each week from your credit card lender with convenient blank checks attached. Cash one and you’ve been hooked for the long haul. Few realize the consequence of taking this bait until it’s too late. You may have a promotional credit card with 0% APR on purchases (as I always do) and think all is fine. Then one day you decide to try out one of these convenient checks (say to pay off a higher interest loan). Or you decide to draw cash from the credit card at an ATM with the handy-dandy PIN that your lender insisted on giving to you. When your next statement arrives you will quickly realize the damage.
You will find an new category on your credit card statement has been created which carries an extremely high interest rate. The catastrophe is that you can never pay down the balance on this new very-high interest balance. Not until after you’ve paid off every penny of any lower-interest balances. Meanwhile, you will be slammed with the same 30% high-interest balance every month while you struggle to pay off the low-interest balances. Also, you will not be able to place any new charges on the credit card without lengthening the period of the high-interest charges.
Playing the "Universal Default" card: This is a "catch-all" where a credit card lender will impose steep penalties on their consumers for bills un-related to credit cards. These are things like being late on a telephone bill or being slapped with a large medical bill that a consumer can't cover. This abuse is so rampant today that people are being swept in by the millions and have little or no protection. Anytime you receive a notice justifying detrimental changes to your account and a credit bureau is mentioned, you are probably a victim of this scheme. If you look at your credit report, you’ll probably find no derogatories against you pertaining to credit cards. You’ll probably find complaints in other areas having nothing to do with credit cards.