Consumers
CREDIT CARD TRAPS
Many credit card issuers have sent solicitations in the mail which advertise in large bold print favorable credit terms and seemingly low interest rates. These solicitations are not always fairly presented, and they may contain hidden terms. You should always read the small print and the terms and conditions before you agree to accept or activate a credit card. Be mindful of the following:
- Some credit cards are sold with a very small credit limit and large fees. The consumers soon learn that they are almost immediately over the limit, and additional over limit fees, late fees and increased interest rates quickly become financially burdensome.
- Some credit card companies start consumers with low rates of interest, but raise the rates, sometimes tripling them, even if the consumers make every payment on time. The small print in the agreement allows the company to raise rates if the consumer has other credit difficulties or loss of credit standing not connected in any way with the credit card payments.
- Some companies charge $25 to $50 for a "gold card" with a large credit limit. These are not regular credit cards but only limited-use cards that can only be used to purchase overpriced goods in a catalog, often requiring the consumer to pay partly in cash for the products.
- Take the time to read the credit card agreement very slowly and carefully - - then read it again. If you don't understand it all, and they are almost impossible to understand, ask questions.