CREDIT
CARD SCAMS
COMMON
CREDIT CARD SCAMS
When in the market for a
credit card, you need to do your homework before you even
consider submitting an application for any type of offer. There
are many different types of credit cards, all of which have
different reward programs, rates and terms. This makes it very
difficult to decide what card is best for your needs. In
addition, there are card issuers that look to take advantage of
consumers that are not familiar with credit cards or how they
work. If you fall prey to one of these companies, you can be
taken for quite a ride financially. Featured below is
information detailing some of the more common scams companies
use. If you can spot these tricks during your research, you can
steer clear from the offending card offer/company!
Credit cards that charge fees in advance
It is very common for credit card companies to offer cards
with extremely desirable terms with low interest rates and
generous limits. They boast that this offer is available for
people of all credit types, including bad credit. The only
requirement for approval is that the applicant has to pay a
small fee in advance. The creditor claims that this fee is
either required to process your paperwork or is needed in order
to get you pre-approved. Unfortunately, once the fee is paid,
the credit card company will disappear with your money and you
will never hear or see from them again.
Never
pay any fees upfront in order to get approved for a credit card,
period.
Debt suspension offers
If you can not pay your bill because of an unexpected
illness or event, you do not have to pay your bill. This is
called 'debt suspension' and is offered by every single major
credit card company. The intent is for you to resolve your
issues and/or get your finances back in order before you are
required to proceed with your regularly scheduled payments.
During downtime, no interest will be applied to your card. You
can even continue using your card to make purchases. Does this
sound like an excellent deal? That is because it is! The banks
are making this offer themselves, and don't have to utilize an
insurance company. As a result, it is usually offered to the
consumer for free. The scam takes place when a company
pretending to be an insurance issuer makes the same type of
offer to card holders that are not aware that their card issuer
is already protecting them. Even if the consumer does buy the
additional debt suspension offer from the scamming company, it
is very unlikely that they will ever be able to even submit a
claim, let alone collect from one.
Credit
protection
In the event that your
credit card is stolen or lost and used without your consent, you
will not be responsible for the charges that are made. In fact,
there is a federal law that limits your liability in the event
of fraudulent charges to $50. However, there are scamming
companies that sell credit protection programs to consumers that
do not know that they are already protected. Similarly to the
fake 'debt suspension' offers, even if this credit protection
offer is purchased, the likelihood of collecting from a claim is
most likely going to be zero!
In
conclusion...
It is very important that
you know what credit card companies offer and what your rights
as a consumer are. This will help you avoid becoming a victim of
one of the thousands of companies that prey on consumers that
lack credit card knowledge.
