Learning how to play fair is a lesson that is taught early in childhood. Most parents make sure that by the time their child hits grade school, they know right from wrong.
Telling right from wrong is not so easy when it comes to credit cards however. Some credit card practices may seem unfair at first glance, but when you think about them they make perfect sense. However, there are some policies that are accepted in the credit card industry that don't make as much sense.
And of course not all credit card companies are created equal. Some try to help the consumer, and some are down right bad. Then there are some companies that give preference to some customers, and punish a different set of customers unfairly.
The following is a short list of tactics used in the credit card industry, and which are fair game and which are just bad business. There are also tips on what you can do if you feel you have been taken advantage of.
Mysterious interest rates
Fair: charging different customers different interest rates or offering different terms, based on their credit card score.
Foul: not telling people which interest rate they'll end up receiving.
The general assumption is that if you have a good credit history, you'll get a good credit interest rate, and other benefits. Afterall, why should those who are more responsible with their borrowing have to pay higher rates to make up for those who don't pay their bills on time.
However, you should get to know what interest rate you're going to receive when applying to a credit card. Though some issuers, including Citibank and Capital One, usually tell you in advance what rate you'll get if you're approved, others -- including Chase, Discover, American Express, HSBC and Bank of America -- typically only offer a range of possible rates. You might get a rate that's in the single digits or one that's over 20%.
In an ideal situation you would fill out an application, be told what interest rate you qualify for, and choose to accept it or deny it. However, this is not the way it works. You may not even know what your interest rate is, until you actually get the card in the mail.
Many times the rate is variable as well. A card may offer 0% for "up to" a year, but when you actually get the card, you may only get the 0% interest rate for as little as 3 months.
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