While the recently enacted credit card rules provided some positive changes to the credit card landscape, there are still plenty of ways credit card companies can make a fool out of you, all while making a profit. To kick off Financial Literacy Month the team at FoolProof has decided to highlight some of the worst credit card tricks that affect young people today -- and to help you figure out how to not look like a fool.
FoolProof looked at the findings of the Pew Charitable Trust's November 2009 report on credit cards(pdf) and determined that even with the new regulations in place, 100% of the credit cards offered to young people by the 12 biggest banks still use practices deemed "Unfair and Deceptive" under Federal Reserve guidelines.
Examples of these Unfair or deceptive practices include the following practices of big bank credit cards.
90% of these credit cards still continue to charge their penalty interest rate even if you resume making on-time payments.
100% of these credit cards encourage young people to use cash advances – the highest interest rate uses for a credit card.
100% of these credit card companies constantly push young people to charge more than they can pay off each month.
Will deHoo, CEO of FoolProof, provides several tips to help you stay smart about credit: