What Credit Card Companies Don’t Want You to Know

Many people are under the impression that a credit card is their best friend. That might be true when it first arrives, but for most people the illusion quickly wanes when the true horrors of the credit card come to the fore.

Most people also seem to think that as long as they pay off their monthly balance in time, and not exceed their credit limit, their credit card company will remain utterly loyal to them and work for their benefit. And that is where they would be supremely wrong.

Believe it or not but the credit card industry actually thrives by keeping some very important facts from you, because your financial gain means their loss. Read on to find out what they are.

·       Multiple Penalties for Single Offense

You might assume that if, for example, you were to make one late payment then you would be charged just one penalty for it right? Wrong! Some credit card companies charge you twice. It could be in the form of a charge for the late fees and interest on it. And what is even more disturbing is that you won’t even know about it until you check it.

·       No Such Thing as a No-Limit Card

If you think that no-limit credit cards actually don’t have any limit then you would be wrong. Most of them actually come with a preset limit which the credit card determines upon your spending habit. They already know how much you are going to spend and encourage you to spend even more and this makes the interest rates jump sky high. Before availing the no-limit card, ask the card provider if the card comes with a predetermined limit. Make sure not to cross that amount.  

·       Minimum to Maximum Payments

Credit card companies prosper the longer you are under debt. With the threat of a huge interest rate, debtors are liable to make payments as quickly as possible to get out of  debt. That is why most credit card companies have lowered the rates, so that people would become complacent and not worry about making payments on time. This also makes people spend more which in turn accrues even more debt. This pattern can make the payment schedule last for decades.

·       No Such Thing as Fixed Rates

It’s not really a secret that your credit card provider can change the APR anytime they want. It’s just that most people aren’t aware of it because this detail is buried under all the terms and written in very fine print. By law, the company is required to tell you fifteen days in advance about the increase in APR, but most people either get the letter late or not at all.

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