08 Sep Outrageous Credit Card Provisions
Last week, a very interesting article entitled “Crazy Credit Card Offers” appeared on the Motley Fool web site. This particular card was a Best Buy card and the offer contained the following provisions:
- cash advance fees of 5% of the cash obtained. A $500 cash advance would therefore cost $25
- late fee charges of between $29 and $35
- late fee triggers interest rate of 30%
- if you request an increase in your limit, you could be charged 50% of that increase (example, if you wanted an credit limit increase of $2,000, you would be charged $1,000!)
The point here is not to pick on Best Buy but to sensitize you to some of the outrageous provisions in credit card agreements. More likely than not you would apply for a Best Buy card when you are shopping there and all ready to take that new plasma tv home. The Best Buy associate may offer a free gift or discount if you make the purchase on your new Best Buy card and you might not be inclined to read the fine print.
The best advice I ever heard about credit cards is as follows: cut up all but one card; take that one card and freeze it in a block of ice. If you feel that you need to buy something on credit, think about it until the block of ice melts.
Jonathan Ginsberg, Esq.
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