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When you are paying your credit card bill, there are secrets that most credit card companies are withholding in order to maximize their profits, and guess where those profits are mostly coming from? Your pockets! It is extremely important to look at your statements very carefully, as the “secrets” are usually staring you right in the face! There are three charges on your credit card statement that if you pay very careful attention, you could not only potentially save hundreds of dollars per month, but preserve your credit rating.
Credit Rate Hikes: With the state of the economy, credit card companies are working hard to protect themselves from as many risks as possible and are forced to write off a lot of money. Some report that figure at over $100 billion! To recoup, there are companies that are doubling and tripling rates for all of their customers, even those with excellent histories and credit ratings. This can be spotted however, with close attention to your statement; because, the credit card companies are obligated to give you two weeks notice of rate changes in writing.
Credit Limits: This has been an issue with credit card companies for some time now, and it requires very close attention to your spending. When credit card companies slash credit limits, they usually slash them to 2 or 3 dollars above your outstanding balance. It is very important that before every purchase, you make sure that you have the credit available so you do not go over your limit. Once you go over your limit, not only do you pay an over the limit fee, but your credit score takes a big hit. This is because your available credit decreases as your spending increases. Thirty percent of your credit score is determined by the percentage of available credit you use, and if your credit score declines, then it is harder to get a loan for a car, mortgage, etc.
International Fees: This rather new tactic utilized by credit card companies to increase charges for purchases made abroad from 1 or 2 percent to 3 percent. What’s surprising is that you might get hit with this fee even if you do not make the purchase overseas! If you buy something online or place an order with a company out of the country, it is processed through a foreign bank and the fee is charged. Always be careful when you are purchasing items over the internet, and be aware of and watch out for international fees! You will be able to see these three charges on your statement, and take action to prevent from happening further or try to reverse. Vigilance is necessary!
Consumer Protection Plans: Finally, do not be tricked by “consumer protection plans.” These plans really are just taking advantage of the fears most cardholders have concerning job stability. Know that when they claim to “protect” you, what they really do, in the event of a loss of employment is freeze your account, and charge you $1 for $100 you owe, this can certainly add up especially with added interest. Those rates can increase from 50 to 100 percent! So in addition to keeping a careful eye on your credit card statement, just say no to those consumer protection plans!
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