Identify The Most Common Credit Card Scams
You can be a newbie credit card user or you can be an old pro in the credit card game, you should still be aware of the various scams that can come your way. While there are plenty of trustworthy credit card companies, there are also those shady ones who want to take your money.
If you don’t have the slightest idea of how easily you can be duped by these con artists, you could lose several hundred dollars or more. Read about these vicious credit card scams and learn how to spot – and prevent – a potential rip-off.
Suspension of debt service
Banks sometimes provide debt suspension offers as a service to “assist” you to be up-to-date with your card payments. In this scheme, you need to pay a fixed monthly amount so in the event you fail to pay your bills, interest will not accrue throughout this period.
While this sounds too good to be true initially, the scheme really aims to fleece its victim. You’re disallowed to use your card if you’re unemployed, and while no interest has accumulated, your balance stays unpaid and you still have to pay it when you find work again. What happened is you’ve been paying for something that won’t be of much use to you.
If you’re offered a credit card, first verify that a debt suspension offer of this kind is not inserted in the agreement as this will cost you later. If it is included, then have it taken out and get a standalone insurance policy to assist in your bill payments in the event you are unemployed.
Advance approval fees
This scam is one of the worst there is and the victims are people who are in dire need of a card that has great rates. The “operator” will provide you with such a card but you need to pay an approval or administration fee in advance for your application to be processed.
Once you have been divested of this fee, the company will simply run away with your hard-earned money. If you are offered a credit card which asks for an advanced approval payment, just turn it down. Even borrowers with bad credits don’t need to pay in advance for cards. The lenders can only accept or turn down applications, and no fees are required.
Credit card protection
Another common scam that has claimed a lot of victims is giving your card credit protection in the event it is lost or stolen. The premium for this added safeguard is often very high but offers very little protection.
If you are quick in reporting a stolen credit card, then you don’t stand to lose much, and you are further covered by other consumer laws and insurance. If protection is really needed, then get a standalone policy from another company which can be less expensive and lets you cover all your cards simultaneously.
Getting a credit card requires a lot of checking and understanding of the clauses within the contract before signing. If something seems fishy, then decline the contract and look for another company to deal with. Be sure to know the pitfalls of the game and you’ll eventually find a respectable credit card company where you can get great rates.
