Credit Card Debt Relief Secrets

Credit Card Cash Advance Checks

Your credit card bank sends you some “convenience” checks you can use to pay off bills. How handy! But check the terms very closely.

Are these checks really disguised credit card cash advances, complete with huge cash advance fees and incredibly high interest rates? People get confused by the bold print offering low interest rates on new purchases, not cash advances which is what those checks may actually be.

When you get a cash advance, they "place" that debt at the bottom of your outstanding balance. This means you'll be paying off your lower interest rate purchases first and the higher interest rate cash advances will stay right at the bottom of the stack to be paid off last, driving up all of your future credit card payments and keeping you in debt much, much, much longer.

You get a notice that your credit card firm has been purchased by another bank or has merged with another. This can be bad news. The usual practice is for the new firm to re-evaluate all accounts using a new stricter set of credit standards which can cost you big time if the new firm is more aggressive and hungry for profits.

The top customers, the most desirable ones are those who, of course, pay regularly, carry heavy balances from month to month, and always pay only the minimum payment. They get the lowest rate cards (around fixed 8%), with no annual or other fees. But today the hottest new market for credit cards are college students and other high risk groups.

Don't think those tiny fees will add up to much? Last year the credit card industry made near record profits. And they did it by increasing fee income from 28% of profits to over 31%! They "nickel and dime" us to death or as the Chinese would say, it's death by a thousand cuts.

They use our credit file information to determine our interest rate despite the fact that over one third of their files contain significant errors that could make it all but impossible to buy a car or house. Be sure you check your file at least once each year, more often if you have more than four or five cards.

They charge you a "transaction fee" when you transfer your balance to another credit card. Hey, they're not worried about offending you now - you're on your way out their door!

Some cards have fee ceilings which means when they charge you a fee that is calculated as a percentage, they limit the actual dollar amount of the fee, but more and more firms are dispensing with such niceties. They charge the full amount on any sum, no matter how high. It's not at all unusual these days to see a $5,000 balance transfer with a $100-200 fee attached!

You have problems with a card company. You pay them off or transfer their balance to a new firm and wash your hands of those old idiots. If you don't notify them that you are closing your account (by certified mail is best) - they may hit you with inactivity fees - even though they never issued you a new card!

When it Comes to Credit Cards - Fixed Doesn't Mean Fixed!

You receive a credit card offer that includes a host of juicy inducements including a low "fixed" interest rate. But two months later the issuer sends out a revised cardholder agreement that raises the fixed rate to the moon and promptly drops all the other inducements. It's perfectly legal to offer membership benefits and then cancel them without any notice at all! It happens every day.

Cardholders who always pay the minimum payment are highly valued by credit card companies (particularly if they always pay on time) but they also know that you're stretched rather thin.

By paying a bit more than the minimum payment you're dramatically shortening the term and amount of your overall credit card debt and at the same time you're showing the issuer that you're not impoverished and desperate.

They automatically (without your permission or notification) re-issue you a cancelled card and charge you a re-issuing fee on an old account you long ago abandoned. The fee is applied to your (old) account and if you don't pay, the fees mount up and they may notify the credit agencies of your poor payment history. If you don't want the credit card, destroy the card, call them and make it clear that you'll be paying no fees on this old account.

They can always claim that they didn’t get the message – unless you confirm your conversation with a letter sent by registered mail (with addressee confirmation). This is the only way you can obtain a document that proves they received your communication.

You're a Bad Credit Card Risk!

They offer you a tremendous bargain - credit card transfer balances at zero interest for a full year! Wow - what a deal, you feverishly fill out the form and mail it off right away! When the credit card arrives you're shocked to find that the terms are nowhere near what they promised! What the --? How did this happen - simple - they "risk adjusted" your account.

Only 3-5% of the general public can qualify for the great low rate they splashed all over the envelope front in big red letters. But lowly you with your average payment history and sub zillion dollar income can only qualify for their "copper" credit card with a nasty 27.99% interest rate!

Car dealers are under government pressure because those fabulous lease deals they advertise all over the place ("drive this new Mercedes for only $299 a month!") are only available to those special few who have absolutely spotless credit ratings - not your average guy.

Some banks will allow you to return to the lower preferred rate after you make 3, 6 or 12 on-time payments (though you'll probably have to phone them to force them to restore the lower rate.) But some credit card banks are much more greedy, and will hike your rate permanently!