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.
Debt suspension scam
Suspension of debt is a service occasionally extended by banks as a means to “help” you stay current with your payments. This scam will require you to pay a predetermined fee every month, guaranteeing that no interest will ever accrue in case you can not pay your bills.
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.
Upfront 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’ve made the payment, the company will vanish and move on to their next victim. If a card is offered that requires a payment upfront, simply decline. Even with a poor credit you are not required to pay advanced fees for cards. The lender can only either approve or disapprove your application; no fees are needed.
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 report a stolen card right away, then there’s a high probability you won’t lose much, as you’re already protected by consumer laws. If you must require protection, then obtain a less expensive independent policy that will provide protective coverage for all your credit cards at the same time.
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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