When it comes to credit card issuers, many have bad reputations among consumers and with good reason. Credit card companies are professionals at creating scams that consumers fall for over and over again. These scams can wind up costing you hundreds or thousands of dollars that you often can’t get back.
Sometimes, the fees and charges from the scams can put you so far into debt that it starts to effect your credit score. Read on to discover 5 scams and how to avoid them.
1. High-pressure add-ons
Capital One and Discover are two of the biggest offenders in this category. They use high-pressure techniques to get cardholders to sign up for things like payment protection products. Often these programs begin with small fees that can balloon depending on your debt load. While the programs themselves don’t seem too bad, it turns out that consumers weren’t getting their money’s worth and they were having a hard time removing themselves from the programs. When it comes to credit protection, do yourself a favor and just say no.
2. Review your bill
A common scam is that customers have reoccurring charges added to their monthly bills that they didn’t authorize and don’t know anything about. These charges are often from automatic opt-in services like credit protection, credit monitoring or fraud protection. While some consumers notice the charges and have them removed, many others never see them and pay them unknowingly. Review your bill line by line to make sure you don’t have any suspicious charges.
3. Get it in writing
American Express is one company consumers need to be careful with. The credit giant once offered customers $300 in cash back for opening accounts with no intention of honoring the deal. If you’re offered a deal by a credit card company, get the deal in writing just in case they wind up not panning out. Avoid signing up to special deals over the phone where you can’t keep any proof of the offer.
4. Check your credit report
Another offense committed by American Express was not reporting billing disputes properly to credit reporting agencies. Customers should check their credit reports on a yearly basis to make sure all information is accurate and up to date. Make sure that credit companies have reported debts and payments correctly, as certain remarks can have huge impacts on your score.
5. Fight back at bad businesses
Not too many people know about the Consumer Financial Protection Bureau or what the agency can do for you. The CFPB has a special complaint process that allows consumers to report fraudulent practices by their credit card companies and often making a complaint against a bad company can have a big impact on your individual situation. You can file a complaint online or by calling their phone number.
Keeping an eye out for sneaky credit card scams can help you save your credit and your sanity. Nobody likes to be played for a fool, so keep an eye on your credit issuers and make sure they are playing by the same rules you agreed to.