Can the CARD Act Stop Creditor Tricks to Keep You in Debt

Credit card companies use hundreds of tricks and gimmicks to keep consumers in debt. According to R.K. Hammer, the credit card penalty fees revenue will reach $20.5 billion in. Credit cards generate more than $2.5 trillion a year. The credit card industry is one of the largest fraud industries in the country. Here are some common traps credit card companies use to keep consumers in debt.

1. The minimum payment trap keeps consumers in debt and in most cases is not enough to cover the interest and finance charges that accrue each month which is why when you send in a payment your balance either doesn't go down or only goes down by a few dollars.

2. No maximum interest rate for credit cards and is not government regulated. Interest rates are regulated by each state.

3. High late fees are charged either when payments are sent after the due date or sent on the due date although the payment was received on time.

4. Credit card monitoring and credit card insurance. There is no need to purchase credit card insurance because there are so many stipulations when signing up for the insurance that it is to your advantage live below your means to pay down debt.

5. Some credit card term change as the wind blows and makes it difficult for consumers to keep up with the changes.

6. The credit card agreement or disclosure is created using fine print to make it difficult for most consumers to read and those who try to read it get frustrated because of the fine print. However, this document is very important and should be read because it tells you all of the restrictions and guidelines for using the credit card.

7. The payment address or due date may change as a way to confuse consumers so their payment arrives late and they get charged a late fee.

The CARD Act of 2009 will eliminate many of these creditor tricks but the credit card companies will still find ways to work around the law to make money. It is best that you read everything you receive from your credit card company, ask questions and know your rights as a consumer. You can find information on the ftc.gov/credit site.