Tuesday, May 26, 2015

Beware Credit Card Firms’ Odious Tricks


Credit_Card


Credit Card Companies – Reduced Rewards/Cash-backs


Starting a new business and making arrangements for the fund could at times come from friends or family or even a small business loan from the lender or financial institute. However, when these options seem to be unavailable, one could turn to credit card in availing the funds for a small business.

Credit card is not an invitation to spend money one does not own but the consumer needs to be cautious in using the credit card wisely. Several of the consumers do not take the trouble in reading the card statement carefully that would make them cautious of all the small charges which are imposed by the card company.

It means that a credit card is an easy packaged though a terribly priced personal loan which has the utilities but the charges seems to outweigh the benefits. Since updated EU clampdown on charges has been hitting on the profits, Credit card companies have reduced their rewards and cash-backs. Peter Jackson of Stockport speculates on the rewards that these credit card companies tend to hand out to consumers in a way to confuse them on how much they actually pay to use them.

Companies – Hidden Charges


Jackson writes that `any perks that individuals tend to receive have been paid for, by themselves without their knowledge. What makes matter worse is the fact that because everyone pays the same prices in the vast majority of retail outlets, anyone without a cash-back deal is subsidizing the customers who do’.

 He further goes on the same point with regards to current accounts stating that `this has been going on for years in the form of free banking. Banks give free bank accounts and then make their profits from people going overdrawn’.

In all honesty, he could have made the same point about mortgages, energy bills or mobile phone charges and people with the time and energy seeking out the best deals tends to do well. Others get penalised through higher charges or fewer discounts. Jacksons continues that `instead of charging a fair price for a fair service, companies tend to put all their efforts in hiding charges.

Introductory Deals of Zero Percent – Odious Deceits


It ends up with the poor and financially illiterate supporting the well-off. Why is there no open and honest charge, without all the cross-subsidizing?’ he asks. He states that it is a fair enough question and the one which he constantly puts forth to financial institutes over the years.

There are few notable exceptions most of whom are too frightened of losing business should refrain from competing with the same marketing tricks which their rivals tend to have. The introductory deals of zero percent which credit cards tend to offer are one of the most odious deceits, since people get affected by huge balance transfer fees together with high charges towards the end of the term.

 The faster these tricks or deceits are barred, the better. Consumers should bear these facts in mind and be wary while using the credit cards and avoid the traps the card companies and banks utilise to entice consumers getting them to pay all kinds of penalties and fees.

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