How to Spot and Avoid These Credit Card Rip-offs and Cons
It doesn’t matter whether you’re a first time or long term credit card user; it is paramount that you know about the most common scams that you can fall victim to. Although many reputable card companies abound, there are just as many crooked ones as well.
If you are totally naive of the ways in which these crooks operate, then you can wind up as one of their victims. Below are three of the worst yet most common credit card scams. Study them so you don’t get ripped-off.
Debt suspension scam
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 fees scam
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 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.
If you’re applying for a credit card, be sure to read and check out all the angles of the contract before signing. If anything is not above board, then back out and look for another card company. As long as you are not ignorant of the different credit card scams, you will be able to come upon a reliable card company that can offer you the best deals.
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