Repair credit fast credit card traps financially destroy many unsuspecting card users and abusers. If you use a credit card or plan to use a credit card, absolutely do not make these 3 mistakes.
Alissa D. of White Plains (NY) transferred $13,587.00 in credit card debt to a 0% interest credit card.
“I was ecstatic,” she says. “I’m transferring a bunch of card debt from 3 cards and I don’t have to pay any interest for a year. Yippee! Oh, yeah I almost forgot to tell you, this card has a protection plan in case I lose my job or something like that. It’s a small fee. I can live with the fee, knowing the card is paid off if something bad happens. LOL”
It was then I just had to step in to protect Alissa from her own ignorance.
Alissa had no idea of these 3 traps. Why is it so many SMART people brainwash themselves into believing BANKERS (of all people) are handing out free lunches?
There’s no such thing as a free lunch!
Alissa chose not to read the contract. She got so caught up in the illusion she temporarily turned her brain off. In the next 12 months, she cannot afford to misuse this new credit card or she’ll pay dearly.
Have you jumped all over one of those free lunches peddled by these bankers?
Those sneaky bankers (oops, I apologize for using the “b” word around children).
Anyway, you turn your back for one moment and they’re unleashing more ways to separate us from our money and tossing us into credit card purgatory when we live beyond our means.
Click ‘read more’ below now to discover 3 insidious tricks used by bankers to inflate their free lunch offers.
Get approved now & enjoy FREE interest for one year!
Repeat after me: there is no free lunch! Alissa, the 0% Balance Transfer is only good if you know what you’re doing. The bank only loses money when people actually know how to take advantage of a 0% balance transfer deal.
TRAP #1: You transfer at 0% interest & the bank hits you for with a fee for doing the transfer. The average fee is 3% of the amount of each balance transfer with a $5 minimum. Want to transfer $10,000 from the high interest card? It will cost you $300 right off the top.
With this shiny new 0% rate card, you gotta charge some stuff, right? Oops, Alissa didn’t know the 0% only applies to the transferred amount, not new purchases (charges). She thought it was 0% for the year!
Get this: The payment you make each month goes toward paying down the 0% balance transfer first. The new purchases will keep accruing interest at regular interest (19%). Suddenly, that free lunch is looking pretty expensive, isn’t it?
Oh, but wait, it gets better…for the banker that is. If you make a $10,000 transfer and then make the mistake of charging a $100 dinner for two on the card, interest will be charged on that $150 and will continue to be charged until the $10,000 is paid off.
This is why there are so many 0% offers around holiday time. When did you get your new card offer, Alissa? Hmm, I’m thinking you received this irresistible offer around Christmas, right?
You got it! The banks are hoping you use the card to make those last minute purchases. It is also very common for the banks to raise your credit limit right after you’ve made a transfer. They want you to use the card.
TRAP #2: You don’t have to pay until 2015! Furniture stores, in particular, love getting people psyched over this one. You’re offered a credit card with a no interest period – charge whatever you want interest free for six months to a year…or up to 5 years as with some offers.
All you need to do is make the minimum (2.5% of balance) payment each month and the bank will be happy.
The problem comes when the free interest period is over. If you do not pay off the entire balance at that time, interest not only gets charged, it accrues from the day you got the card.
In other words, all that free interest wasn’t free after all.
The way to avoid this track, of course, is to pay off the full balance when it’s due. However, 50-75% of people do NOT pay their balance in full each month. Ka-Ching. Banks win…you lose.
TRAP #3: You absolutely MUST (must, I say) purchase Credit Card Protection Insurance. Why? Because the banks are telling us this insurance plan is the “bomb.”
Upon closer examination, I see the “bomb” all right, and it’s about to blow up unsuspecting people’s finances.
The insurance supposedly pays off all your credit card debt when you lose your job or suffer a disability and can’t make your payments.
Wow, people say, I never thought about it like that. This insurance sounds like something I need!
How much does it cost?
For an average fee of $0.89 per $100 balance, this insurance will make your monthly MINIMUM payment in the event of involuntary unemployment or disability.
In the case of a critical illness or death, the insurance will pay off your balance as long it’s not more than $10,000.
By the way, if you carry a zero balance, the banks tell you to sign up; it won’t cost you a penny. What a deal, huh?
Anyone who looks at this offer closely will see how big of a scam credit insurance is.
Step back for a moment to examine the real cost of this insurance policy. If you have a $10,000 average balance, it will cost you $89 per month for insurance that will make your minimum payment should you not be able to make the payment due to job loss or disability.
And the trap is…? The “minimum payment” part? That’s right, this insurance only pays your minimum payment. Most credit cards have a monthly minimum payment requirement of 2.5%.
So, the minimum payment on $10,000 would be $250. However, for the privilege of overpaying $89 per month for this insurance, you have the honor of feeling safe.
Believe me, I could hand this article to 100 people (give them the FACTS) and they will pay $89 bucks a months just to FEEL safe.
I want to thank a blogging friend John Chow for alerting his loyal readers to these EVIL traps on his blog @ http://www.johnchow.com/evil-credit-card-tricks/#comment-184841
The more people we can attempt to open their eyes, the better equipped people will be to make the right decisions…using their brains, not some emotional pitch suggesting job loss or disability.
Repair credit fast detours cost people money, time & frustration. Why does it always seem we’re on a sidewalk in New York City, surrounded by a bunch of pickpockets who are just waiting for us to move our hand off our purses and wallets just a 1/64th of an inch?
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