Sneaky Credit Card Tricks

17 May Sneaky Credit Card Tricks

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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L. Jed Berliner practices exclusively in consumer bankruptcy, foreclosure defense, and related consumer protection litigation such as credit card defenses and suing debt collectors. He established his Springfield, MA practice in 1988. Attorney Berliner is a regular and active contributor to the Bankruptcy Law Network, the Bankruptcy Roundtable, and the National Association of Consumer Bankruptcy Attorneys, three specialized consumer bankruptcy forums on the Internet, and is an informal mentor to regional practitioners. He is recognized by his peers as an expert in consumer bankruptcy issues. He thoroughly enjoys being rated "excellent" in his client surveys.

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