10 ways credit card companies can still mess with you and your money

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How evil is the credit card industry these days? Pretty evil, I'd say.

I thought I'd call attention to The Business Insider, which has an amusing -- and unfortunately true -- story on the 10 ways credit cards can still screw you. Well, it's amusing, in the way that being run over by a car is amusing. Perhaps the people making up the credit card rules used to work in the waterboarding department of the defense department. That's my working theory, anyway.

The article offers a helpful checklist of strategies that the plastic payment industry employs to squeeze more money out of its consumers. In a nutshell, what they're doing to take your money away from you include

  1. jacking up rates
  2. raising penalties
  3. closing accounts and reducing credit card limits
  4. increasing cash advance and balance transfer fees
  5. increasing annual fees
  6. manipulating rates
  7. redefining terms to collect more fees
  8. cutting rewards
  9. creating new fees
  10. closing accounts without notice
Again, an interesting article worth checking out, but some of the highlights include the Business Insider reporting that according to the new Federal Reserve study, "almost 40% of the banks had increased or will increase the annual fees on credit cards." Another chilling finding in the story--with much of the information in their story coming from the Center for Responsible Lending--is that some credit cards are "adding floors" to the variable rates. In the past, if you had a variable rate on a credit card, your interest might go way up, but it might also come down. But some credit cards are making their cards "partially variable," where they can always go up, but never down.

(If you'll excuse me for a moment, I'm going to leave the room and scream and perhaps pull my hair out.)

(OK, I'm back.)

For those feeling the pressure from having too much credit card debt -- and believe me, I've been there -- the credit card companies are getting even tougher because of the rules that were passed in Congress and signed by President Obama last May. These rules, which you can read about on the White House's website, will go into full force in February. Until that happens, some credit card companies are doing whatever they think they can get away with to keep their profits up. My suggestion? Use your credit card as little as possible until February: Just shovel as much money as you can toward your debt, and do everything you can to make your payments on time.

In February, things should get better, -- that is, until the credit card industry finds more loopholes to make everyone's lives difficult again.

Sigh. I'm trying to figure out when and how I got so jaded, and then I remembered -- it happened during my years and years of carrying credit card debt. But I'm not completely predicting doom. The new guidelines do seem pretty thorough, and I'm hopeful they'll keep the credit card industry from adopting sleazy tactics (like changing the date your payment is due, hoping you won't notice, and then hitting you with a late fee when you're a day or two late). And one sign that the rules are effective is that it has the credit card companies throwing out these creative new fees and raising rates every other day. Those credit card executives are running scared.

But the best part about these new rules? According to the White House's document I linked to above, if the credit card companies break the rules that go into place in February, they'll "face significantly higher penalties than under current law."

Meaning that credit card companies could just find themselves complaining about unfair, hefty fees. There's something pleasant in that thought, methinks.

Geoff Williams is a regular contributor to WalletPop, as well as the co-author of the upcoming book, Living Well with Bad Credit.
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