Trying to get your credit life back in order can be easier said than done. What you’re going to have to focus on is getting credit, protecting that credit, and making sure that you will be able to really keep the credit going for a long time to come. You can’t ride off of good credit forever — it’s only designed to stay around for about ten years. So even if you had good credit in the past, you’re going to have to maintain the credit in order to see your credit score grow.
Knowing the sneaky tricks that credit cards do can help you stay in the game for a long time — here are some of the top tricks that are still kicking around this industry to this day.
1. Universal Default Clauses
Universal default is something that we’ve already written about, but it bears repeating. Just about every credit card that you can think about will definitely have this written into your contract with them. Universal default is about as nasty as it sounds — if you default on one credit card, you’re going to get an interest rate hijacking from all of them. So that means that you really need to make sure that you’re on your guard as much as possible. Paying early is the best defense against the universal default clause. If you know that your paycheck is coming already and you’re still way ahead of the due date, send in your payment anyway. It’s going to save you in terms of interest costs, and it’s also going to give you the peace of mind that comes from knowing that your credit card isn’t going to slap you with a higher interest rate for no reason.
2. Bait and Switch
Are you taken in by that shiny new credit card offer you saw on TV? You know the one with all of the miles and the low interest rate? Well, you might want to be careful — that shiny new offer might not be as shiny as you think. Generally, those cards require you to be in the top tier of credit applicants. If you don’t have that type of credit score, what you will probably be given is another card that has different terms. Make sure that you read the terms correctly — even if you only charge a penny to that different card, you’re bound by the terms of that card. No negotiation, nada — you need to just cancel the account and move on unless you can make the new card work anyway.
3. Shifting Addresses
What if you want to pay by mail? You can end up getting nailed by a credit card company’s address changes. Their payment P.O box can change at will, and if you don’t keep up with the changes you’re going to have a raised interest rate and a late fee to deal with.
The solution? Pay early. Pay early. And oh yeah — pay early some more. Your best defense against most credit card tricks is to pay early. Unfortunately not everyone pays on time, and they end up waiting to the last minute. If you’re still mailing payments, you might want to switch to scheduled online payments. That’s a safer way to pay your monthly fees anyway!
4. Cash advance fees
Cash advance fees can really slow you down and there’s really no reason for it. Even if you have a 0% interest rate credit card, you will be surprised at how much money the company will charge you for the privilege of taking money off your credit card. There is often no grace period for this type of cash advance business either — you get to start paying interest right away! Isn’t that fun? Not really.
You will also have to deal with a cash advance fee of 2-4% of what you take out, and your payments won’t go to the cash advance if you have other purchases on the card. They want to make sure that the high interest items stay on the account for as long as possible.
5. Credit Card Theft Insurance
What a rip off! You don’t need credit card theft insurance, but it’s not like the credit card company is actually going to tell you this. They’re going to wait and see what you’re going to do. And in most cases, you’ll sign up for it because nobody wants to wake up to the idea of having to pay so much money that they didn’t even charge up.
The secret that they don’t want to tell you is that if your credit card is stolen, you’re only liable for up to $50. As long as you report the stolen card as soon as possible (and follow it up in writing), your total liability is limited to $50. And with many card companies, they don’t even enforce that — to keep goodwill high, they’ll just excuse the $50 as well.
These are only some of the sneaky card tricks that can happen to you — make sure that you’re really taking the time to read up on those terms and conditions that everyone loves to skip over. That’s the best way to really make sure that everything goes smoothly in the long run!