Sneaky credit card tricks

[Helevitia]

I've been really learning and watching my credit for the past few years and learning a lot about credit card companies in general. This article points out some of the really sneak crap that the credit card companies get away with.

http://www.smartmoney.com/consumer/index.cfm?story=20050728

[Jammrock]

This is why I call credit cards Evil Plastic Demon Gods. If don't have any your credit rating sucks - you need 2-4 major credit cards, no more, no less, to have "ideal credit." Yet if you keep a zero balance, a "deadbeat" in credit card company terms, that can actually hurt your credit rating. But if you put too much money on your credit cards it sinks your rating and they increase your interest rates.

No everything from your car insurance (yes insurance) to your home loans depends on how well your credit rating is.

Thus they are ... Evil Plastic Demon Gods.

Jammrock

[Dr Mordrid]

We only use debit cards from our bank, and for online transactions we use the Master Card gift cards that said bank gives us for face value as a perk. This way we don't have to give out our accounts debit card number for said transactions.

Dr. Mordrid

[Jon P. Inghram]

I find keeping a small unpaid debt on my credit record works wonders at keeping the annoying credit card offers out of the mail.

[TnT]

Watch The Secret History of the Credit Card at PBS's Frontline site. In fact watch a whole bunch of the streaming Frontlines that they offer. The Merchants of Cool is a truly enlightening and funny one to watch.

[Brian Ellis]

I have 2 cards, one Swiss, one Cypriot. If I do a transaction in a foreign currency, the Cypriot one charges 2.5% whereas the Swiss one "only" 1% over the official conversion rate for the day. In addition, if I use an ATM in a foreign country, there is a CYP 5 (USD 9.50) "processing fee" for the Cyprus card, whereas there is no surcharge for the Swiss one.

In many countries there is an "usury limit" on chargeable interest. In Switzerland, it is 18% p.a. simple interest. In this country, it used to be 9% a few years ago, but I think they upped it to 20%. APRs of >20% would therefore be illegal in such countries and the bankers could be prosecuted in a criminal court. In any case, when official interest rates vary from about 0% to 4½% in the OECD countries, anything over 10% becomes obscene.

[KvHagedorn]

Here in our "free country" they can charge up to 30% in some places. Nice to know the US congress is more corrupt than the govt. of Cyprus. National usury laws could never be passed here for the rain of cash those companies throw at "our" representatives.

[Umfriend]

In any case, when official interest rates vary from about 0% to 4½% in the OECD countries, anything over 10% becomes obscene.

We are just having a debate on this over here where the limit is, I think 21% right now. Some politician woke up and cried wolfe. Of course, she had not really had a cup of coffe yet or she would have realised that:
1. Any credit institution is not allowed to charge any costs for credit aside from an up-front fee and interest itself
2, The institutions she specifically mentioned give credit in the range of, for instance, 25 to 200 euro's. 21% of the is 4.2 euro, way to little to make up for admin costs etc. In fact, if the balance of debt becomes larger, interest rates charge come down significantly and quickly.

[Helevitia]

You need 2-4 major credit cards, no more, no less, to have "ideal credit."

This is not true. It doesn't matter how many or little cards you have. Things that matter are: 3 years or more with established credit. Debt to balance ratio, so if you owe $10,000 but you have $100,000 in credit, then your ratio is only 10%. Your credit rating doesn't get dinged to bad until after 30% and starts to drop off substantially after 50%. In fact, having more credit cards is in your favor, assuming your debt to credit ratio is in check and you are making your payments on time. Also, there is a difference between consumer debt(credit cards, retail cards) and fixed payment loan debt(mortgage and auto loans).

Yet if you keep a zero balance, a "deadbeat" in credit card company terms, that can actually hurt your credit rating. But if you put too much money on your credit cards it sinks your rating and they increase your interest rates.

See above.

[KvHagedorn]

This is not true. It doesn't matter how many or little cards you have. Things that matter are: 3 years or more with established credit. Debt to balance ratio, so if you owe $10,000 but you have $100,000 in credit, then your ratio is only 10%. Your credit rating doesn't get dinged to bad until after 30% and starts to drop off substantially after 50%. In fact, having more credit cards is in your favor, assuming your debt to credit ratio is in check and you are making your payments on time. Also, there is a difference between consumer debt(credit cards, retail cards) and fixed payment loan debt(mortgage and auto loans).

Actually, If you have one card almost maxed because of its great interest rate, and two or three cards dormant, they still smack you because that one card is at 90% or so.. I don't think it really goes by your total accumulated credit limits vs total accumulated debt. My rating actually dropped when I moved all my cc debt to the cards with the best interest rate.

[Helevitia]

Actually, If you have one card almost maxed because of its great interest rate, and two or three cards dormant, they still smack you because that one card is at 90% or so.. I don't think it really goes by your total accumulated credit limits vs total accumulated debt. My rating actually dropped when I moved all my cc debt to the cards with the best interest rate.

Anytime you use a credit card, it shows up almost immediately on your credit report but it takes, sometimes up to 3 months for a payment to show up. You need to wait atleast 2 months for your credit to settle. before checking your score.