Tricks Credit Card Companies Use

Many credit card companies offer cards that reward you with frequent flier miles or money towards the purchase of a new car. But you should study the terms carefully because if you don't qualify, they have been known to send a completely different card with different terms. Before you pay more in interest, cancel the account immediately. You should also avoid zero-percent offers because there's always a big catch especially if you miss a payment or when the introductory period ends and the rate goes sky-high.

They have fees to charge for nearly every situation. Some charge a late fee if your monthly payment isn't received by a specified time on a certain day. Check your statement for due dates and times. Watch for over-the-limit fees and transfer fees if you're transferring a balance from another credit card. If you're maxed out and the new credit card has a lower limit than you think, you'll be hit with an over-the-limit fee and possibly a higher interest rate as a consequence for going over. Also be sure to ask how long the new credit card's introductory rate will last. Usually the rates are only good for six months. Taking cash out of your credit card is a bad idea because the rate for cash advances is much higher than it is for purchases and there is no grace period, you start paying interest right away. Credit card companies also stick it to you when you vacation abroad. Visa and MasterCard both charge a 1 percent currency exchange fee and some major banks charge a 2 percent fee on credit card and debit card purchases made outside the United States.

These companies are also notorious for changing their payment P.O. Box. When you send your payment to the old address it meanders around their headquarters before finally making its way to the payments department who then charges a late fee. Check the mailing address each month, pay early and consider paying online to avoid this situation.

If your payment was late last month, the company may have forgiven the fee but you may see an increased rate on next month's statement because you were late on a payment. Credit card companies frequently check your credit report for late payments on auto loans to justify rate increases. Remember fixed rates really aren't fixed. By law, credit card companies must give you 15 days notice before they raise your rate. They don't need a reason and if you call them and ask them to lower it, they don't have to do it. If your credit card company resorts to these tactics, the best thing you can do is get a new card and cancel the old one.

Avoid buying insurance. If your card is stolen, you are only liable for up to $50, making theft insurance a needless expense. Disability insurance through your credit card company will only make your debt worse, if it ever kicks in.

There's a reason these companies set the minimum payment at 2% of your total debt. At that rate you'll be paying it down the rest of your life. Pay as much as you can with the goal of paying off the entire balance as quickly as possible. Another trick is shrinking the grace period between the statement date and the payment due date so that by the time you get your bill, you're already paying interest on the balance you carry.

Finally, you need patience, persistence and a good sense of humor to deal with customer service agents who will transfer you, put you on hold and even hang up on you until you are blue in the face.

Negotiating with credit card companies is exhausting but can save you money in the long run. This savings will help your pocketbook, help your credit score, and make it easier to get a military loan.