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Credit Card Features that Steal Your Money |
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Posted: 9th December 2011 |
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What many people don’t realize is that the banks are in
business for one reason – to generate profits for their
shareholders. While that may sound a bit harsh, it’s
true. There first responsibility is to their owners, so
when new regulations are imposed upon them to cap the
amount of interest they can charge, they need to find a
way to replace that lost revenue. .
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With millions of customers the can
accomplish this through the “nickel and
dime” approach of inching up fees here and
there and by adding more bells and whistles
for which they can charge additional fees.
Consumers may have one a battle when they
backed the banks off of their proposed debit
card fees, but the banks are still winning
the war.
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Here are a few ways credit card issuers try
to get a bigger share of your wallet:
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Credit protection plans: Typically
offered when a new card is activated, these
plans are promoted as payment protection in
the event of unemployment or a medical
disability. While this may seem like a good
idea, especially in this economic
environment, the only ones being protected
are the banks. The reality is that these
plans are nothing more than a
hyper-expensive insurance policy. Your best
course is to build up your emergency fund. |
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Fraud protection: Why would you pay
for something that is already supposed to be
provided to you? Under the
Fair Credit Billing
Act you can’t be liable for more
than $50 for any instance of credit fraud.
Many banks will waive that anyway. |
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Convenience checks: These turn out to
be a convenient way for the bank to make
more money. When you use one these checks
you’ll not only be hit with a fee, similar
to a balance transfer fee, but the interest
charged is typically at the upper end. The
same goes for ATM withdrawals using your
credit card. Just say no thanks. |
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