|
Author: Grant Marwick Article source: http://www.goarticles.com/. Used with author's permission.
There are many of us that have been badly stung by credit card companies that have charged exorbitant fees to use their credit cards. Several years ago an APR of 25% to 29% was common place which in simple terms means that if you borrow £1,000 your interest on that money would be £250 to £290 a year. Criminal when you think of it but I suppose we have to consider interest rates were much higher 8 to 10 years ago and there were fewer credit card companies on the market.
Today the low interest rates that we are experiencing have spurned hundreds of loan and credit card companies cashing in on the cheap cost of borrowing. To get approved for a loan or a credit card nowadays has never been easier. With the advent of the internet you can get approved for a loan or credit card in 10 minutes. So we all have a few 0%, low interest rate credit cards in our bags and wallets but lets find out a bit more about the sting in the tail of these cards.
1. Monthly Repayments:
Well done if you pay your bill off each month in full. Like most of us we only pay off the minimum monthly repayment; this is usually a % of the outstanding balance or no less that £5. Some credit cards will set the minimum repayment on a card at such a low amount that you inevitably end up paying the interest and nothing else. When this happens you end up with a compound interest scenario. Beware you could end up paying off a £2,000 loan for the next 20 years.
2. Credit Card repayment protection (CCRP):
Credit Card companies make a fair amount of money out of you when you use their cards. But wait they want to make some more. Just in case you die or lose your job they will offer you Credit Card protection for a monthly fee. These are usually over priced. Most credit card companies make a fortune out of these policies as most people don't understand how these fees are calculated so don't know there true worth. What most people are buying is the piece of mind.
3. Penalty fees:
If you do not pay on time you will be charged a late payment fine. These vary depending on your credit card company. The best way to prevent this happening is to set up a direct debit. You get charged for exceeding your credit limit. Again this is a very sneaky way for the credit card companies to make money off of us. Most of us will slip up without even knowing it and a charge of £25 can quite easily go unnoticed on our statements. Be diligent and don't give the card companies any excuse to make these charges.
4. Protection Plans:
This is another juicy money maker for the card companies. For an annual fee you will get protection on your card in the event of them being stolen, lost or used fraudulently. Most credit card companies usually don't charge for this and will refund you the money for any fraudulent transactions. I wouldn't suggest getting this.
5. Credit Limit increase:
You had a credit limit of £3,000 and have been diligently paying off your card every month and all of a sudden your new credit card statement says you have a credit limit of £10,000. You probably didn't ask for the increase but hey they gave it to you anyway. Psychologically this makes you think you have more money to spend but it is in fact a sneaky way of getting you to spend more money on your card. If you don't need it ask your credit card company to remove the new limit.
6. Foreign transaction charges
It is usually quite convenient to use your credit card abroad on holiday or on a business trip. No need to carry large sums of foreign currency around with you. But wait for it …….. You will be charge for this privilege (not surprised I am sure). You will be charged a commission depending on the amount you spend abroad which can vary from 3% to 5%.
7. Cash withdrawal charges:
Not much new here. If you withdraw money from a cash point using your credit card you will be charged for the privilege. Remember nothing slips through. Card companies can charge in the region 3% of the amount drawn and the bad news as if this isn't bad enough, you won't benefit from any promotional 0% introductory offers that are currently running on your card.
As you can see credit card companies make money from us in more ways than we in most cases are aware of. Be smart and remember all these crucial aspects when using your credit card. You may be one of the few that limits the credit card companies from only making the bare minimum from you. Grant Marwick is a freelance writer and owner of http://www.only-credit-cards.co.uk where you will find advice and more articles on Low interest Credit Cards and 0% Credit Cards
Affordable Web Design In Birmingham
How to find cheap web designers
When the Levee Breaks, How Many More Fuel Increases Can We Take
The aftermath of Katrina has affected more that just New Orleans and the surrounding gulf coast. There are huge financial implications world wide associated wit...
Five Steps to Profit from Google Adwords
If you have ever run a Google Adwords campaign, you probably know how frustrating it is when you have to bid up to 10 dollars per keyword, when some of your key...
Are You A Work Addict?
Work addiction is very common in our society today, yet it is not one that is not highly recognised. An interesting article in the March edition of The Success ...
Managers: Are You PR-Fit?
Can you honestly say that your business, non-profit or association's key outside audiences behave in ways that help lead to your success on-the-job? Or, have y...
The 5 Critical Elements of A Successful MLM System
Take it or leave it but all big MLM earners follow a marketing system. They find a system that works and stick to it.
7 Cost Effective Steps to Ensure Your Core Message Gets Through To Your Target Market
How much of your marketing is reaching your prospects where it counts? A lot of what passes for advertising and marketing today bounces right off because your m...
The Power That Controls Our Lives
Everything we do in our life, attitudes, perceptions and behavior are controlled by what lies at the foundational core of our being. By taking control of these ...
An Apple a Day, Does Keep the Doctor Away
Increasing the fiber in your diet has been shown to: reduce your
cholesterol, reduce your hunger, lower your fat absorption, reduce surges in
insulin levels, ...
Achieve Anything, One Step At A Time
No matter how ambitious your goal, you CAN achieve it. You do it by taking one little step at a time. Here are a few tips to help you.
The Deal Breakers
Deal Breakers. Everyone's got them. You know: the instant turn-offs that can turn a romantic dinner for two into an immediate request for the check...
Winter Skin Care
The effect of seasonal weather changes, especially during the winter months, can take a significant toll on your skin. Taking a proactive approach to caring fo...
Six Simple Strategies to Turn Your Walks into Workouts
Want to push your walking to the next level, burn more calories and increase your energy? Try these 6 easy walking techniques.
Yoga for Relaxation
This article explores how we can reconnect with the original spiritual aspects of yoga. This will enhance our practice, giving us greater peace.
The Marketing Rollercoaster
Ever hear someone say "Don't listen to them! They just want to take you on a rollercoaster ride!"
Fear Is Nothing To Be Afraid Of
During a transition, you've got lots of things going on. And lots of people are standing by, waiting to take your money. You'd do well to be scared...
Compare Credit Card Offers and Reward Yourself
Compare Visa, Mastercard, Discover Card, and American Express for the best interest rates and rewards. Get cash back, airline miles, or tons of gifts.
Let Your Light Shine
Have you been hiding your light? Do you have a hard time seeing the light in others? It's time for us all to get past this and begin letting our light shine.
Training Your Dog to Sit
Training your dog to "sit" is probably the first thing you will train your puppy to do. Read on and you will found out why and how to train your dog to sit...
Non-profit Coupon Books and Coupon Mailers for Small Businesses
Coupon books and mailers from orgainzations, clubs and non-profits
Ideas for Making Gift Baskets
Would you like to create a gift basket for a special occasion? Learn how.
What Is Meditation And Which Benefits Does It Have?
Meditation has improved the mental health for many peoples. Maharishi Mahesh Yogi and The Beatles brought this self
improvement method to the western world in ...
Why Insight and Flexibility is More Important than Perseverance in Marketing
Marketing successfully requires not only insight into how a product or service can be successfully marketed but also flexibility into the marketing of a product...
Evening Primrose Oil and Co-Enzyme Q-10: A Dynamic Supplement Duo for Women
A brief look at two excellent supplements for women to increase energy levels, promote healing, anti-aging, prevent joint pain, acne, diabetes and more!
|
Print this page