If you use your credit responsibly and pay your bills on time, then it’s natural to expect that your credit card company will treat you well in return, right?
Not necessarily. A few years ago, I opened my credit card statement to discover that my interest rate had tripled overnight. I made my payments on time, I didn’t have a large balance, and I had a great credit score, but there it was … a whopping 22 percent.
Even in the best of times, card companies are always looking for ways to make money off of us. With credit markets so unpredictable nowadays, they are not above using underhanded tricks and unsavory techniques in order to squeeze out every last dollar. Because of the increasing number of credit card defaults, banks are passing the losses off to their customers in the form of hidden charges, new rules, and outrageous fees. Knowing what kind of tricks to watch for can help ensure that your own wallet doesn’t get taken for a ride.
1. Unexpectedly Raising Your Interest Rate
According to most cards’ terms of service, the lender can raise your interest rate any time they want, especially if you have a high balance or your credit score drops. Credit card companies use information from all parts of your credit report to determine the rate they charge you, including your housing history and your records with other lenders. That means that if you get a few months behind on Card A, Card B will raise your interest rate, even if you’ve been paying them on time. Basically, they’re just looking for any excuse to charge you more money, and if you have even one delinquent account, all of your creditors can (and probably will) raise your interest rate.
2. Changing Your Payment’s Due Date
It’s hard to plan your monthly finances when your credit card payment is due on a different date each month and credit card companies count on this confusion. Sometimes it’s due the 4th, sometimes it’s as late as the 8th, and customers are stuck with a late fee every time their payment doesn’t make it on time, even if the due date falls on a weekend. And whether your payment is late by a few hours or a few weeks, the charge is the same. This tactic has become even more widespread now that more and more people use online banking and automatic payment services.
