ANSWERS: 1
  • It is very important to read all the terms and conditions on a credit card application before committing to accepting an offer of credit. Credit card lending is extremely lucrative for banks, no matter how generous the offer might seem.

    Basic Practice

    Banks charge the store or vendor a percentage of the amount charged, so the bank makes money up front.

    Time Frame

    The interest that the bank would have collected during the introductory period is negligible compared with the amount it will get in the long run.

    The Hook

    The interest charge that kicks in after the introductory period can be so high that it more than compensates for the low introductory rate.

    Terms And Conditions

    Banks can raise the interest rate at will, even on existing balances. The Pew Safe Credit Cards Project found that 99.7 percent of banks engage in this practice.

    A Catch

    Often an "annual fee" is charged just for having an open account even if the account has no balance.

    Warning

    Read the fine print. The creditor can change interest rates and credit limits at any time; all they are required to do is notify the customer by mail of the change.

    Source:

    Credit Infocenter: What are some of the "Questionable" Practices?

    ConsumerAffairs.com: Report: Deceptive Credit Card Practices Remain Widespread

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