Credit card companies are real businesses and they are here to make profits
from us. The traps and tricks they use to make profits are buried in fine prints.
Thriving on a persons inability to repay his monthly balances on time, credit
card companies fill up their coffers. Staying informed and using the credit
card wisely is the only option that will help a credit card holder survive this
onslaught. In this article we look at few things credit card companies use to
get money out of your pocket.
Cash withdrawal by using credit cards attracts huge APR's and a cash withdrawal
fee. The APR's can go up wards of 22% and can jeopardise your financial situation.
Not just cash withdrawal from ATM's, if you play poker online and fund your
gambling payments with your credit card, get ready for a surprise, you will
be charged an cash withdrawal apr- shocking! Isn't it? Credit card companies
send you leaves of checks to 'facilitiate' easy cash withdrawal. Use them and
you are heading for a good high APR for cash advances. The message is clear-
keep a check on using credit cards for cash advances.
Your credit limit increased
This very fact makes some people jump in their seats with joy. Wow! Now I can
borrow more- this statement rings in their heads? But is it all that rosy? Remember
credit card companies by increasing your credit limits want to drive you in
a kind of buying frenzy, so that you borrow more and pay more interest to them.
It is a trick, to earn more revenues. Don't get lured in and spend recklessly.
Let them increase your credit limits, promise yourself that you will always
use the credit card wisely.
The APR Drama
Nothing is much more complicated as the terms and conditions on APR rates that
come with a 0% intro APR credit card. The fine prints usually describe different
APR tiers for purchases, balance transfers and cash advances. Also, the benefits
of 0% APR vanish as soon as you default on your repayments and regular high
APR becomes applicable. The credit card companies are particulary strict about
it. Second trap the credit card company use to get more clients is that they
advertise monthly rates instead of APR for example, a monthly rate of 1.5% can
look very attractive, but translated into APR terms it is a whopping 19.5 %.
So, you get the picture. Who will stay safe from credit card companies clutches?
The one who uses his credit card wisely, and always reads the fine prints carefully
before accepting that plastic.