Sneaky Credit Card Tricks
By L. Jed Berliner, Springfield Bankruptcy Attorney on May 17, 2007 in Financial Resources on the Web, Massachusetts, Personal Finance
Thinking that requesting a credit limit increase can improve your credit score? It can be costly. Consider the RewardZone MasterCard from Best Buy, issued by HSBC. AOL reports that the card’s 4% rebate on Best Buy purchases, and 1% on other purchases, has an expensive string attached: A fee for a credit limit increase that can reach up to 50% of the increase. Ouch ! Unused available credit can improve your credit score, but be careful when asking for increased limits.
There’s also the 1%-3% fee for foreign use of a credit card which was not separately reported on your statement. This practice was recently settled in a class action. You’ll need to estimate your dates of travel and fees, and you can get a claims form from Settlement Administrator, POB 290, Philadelphia, PA 19105. About half of the credit card issuers charge interest on a zero balance account if you paid it off in the middle of a statement cycle.
Finally are the more well-known practices of sudden increases of interest rates despite a fixed fee promise (the fine print says the increase is only effective if you continue using the card) and the “universal default” provisions, where a card bumps up your interest if you’re late with another debt’s payment even if your payment history is otherwise perfect.
It’s a jungle out there. Be very afraid.
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