creditbill.jpgCredit cards can be a reliable way to get unsecured credit based solely on your assessed risk by the company issuing the card. The higher the risk you are to them, the more likely your credit card will come with a higher interest rate. However, not all credit card companies are alike. Some are hoping now to bury some questionable practices in the fine print and reap millions in additional fees and penalties from their customers. If you aren’t sure whether you are being scammed, check out some of the ways that you might incur penalties and fees, sometimes even before you’ve had a chance to use the credit card for purchases.

Small Limit Credit Cards

A credit card that comes with a limit of $300 seems like an easy way to manage your debt. Can’t get in too much debt with a card with such a low limit, right? It all depends on what you consider fair. Many of these low-limit cards come with additional fees like a program fee, an annual fee, a setup fee, or even a participation fee. Basically, it’s money you are paying the credit card company for having the privilege of putting the card in your wallet, whether you use it or not. These fees can easily eat up the majority of your balance and even cause you to go over the limit, causing you to have additional penalties tacked on.

Varying Payment Dates

This appears to be happening with even larger limit cards now. You get your statement and you don’t bother to look at it closely. You’ve been paying on the 26th of each month for months and maybe even scheduled your payment through online banking to make it automatic. Read the statement very closely because it isn’t just the finance rate that is now changing on a moment’s notice. Some companies are trying to switch the payment date without notifying you in advance. If you are a person who works by a regular schedule this tactic can be maddening. The minute you miss the payment, your interest rate gets hiked to the highest possible rate allowed, even if it was missed because of the date being switched on you behind your back. Read the small print on the offer to see if they say they are going to change the date. If it’s not there, when you call for the card, ask the person issuing the card to make the date static on same day of each month. This way, you have some leeway should this practice creep in unnoticed later on.

Time To Think About Payday Loans

When a credit card uses more than 50% of its balance just to open an account, suddenly payday loans look like a bargain in comparison. You know that with a payday loan your short-term loan will incur usually a $30 fee and then the money will have to be repaid on your next paycheck cycle. On a loan of $300 to $600, it’s still far less than some of the fees incurred by questionable practices used by credit card companies.

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