5 MORE Ways To Screw Your Credit Card Company

I’m giving credit cards another kick. I had so much fun writing 5 Ways To Screw Your Credit Card Company that I’ve decided to give those pesky plastic cards a second boot. So if you’re ready to kick up a stink by declaring freedom from insane fees, high interest rates, and butt kicking balance payments then get your boots ready.

Besides, many of you got so passionate about your plastic in your emails to me that I figured we’d all get a charge out of kicking around this costly topic again.

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Since I’d rather see you kick the habit than kick yourself in the butt (I wanted to write ass) in the New Year, here are 5 MORE Ways To Screw Your Credit Card Company — and again, they’re all legal!

1. Stop staying loyal to “Loyalty Programs”

Years ago I played like a “good dog” and stayed loyal to a credit card loyalty program that really bit. The program appealed to my romantic dreams of flying for free on “points” and seeing the world for a mere annual fee. The problem was, I never seemed to collect enough points to get my gold card off the ground and the annual fee alone could have paid for a plane ticket home! Ouch!

I wrote about this sneaky credit card tactic in my book, 397 Ways To Save Money — and I lived to tell the dog’s tale.

If you think the cost of a “free” reward ticket or loyalty bonus is costing you a small fortune in fees at a higher interest rate, then do yourself a favor by doing some simple math. If the fees paid for your card add up to more than the free reward, then find yourself another credit card with a more attainable rewards program. It makes NO sense to stay loyal to a credit card rewards program that just doesn’t fly. Besides, loyalty is for the dogs.

2. Take a pass on “Convenience Checks”

Oh those credit card companies LOVE to send us stuff in the mail. They offer us 0% balance transfers, extra credit cards, and even offer teaser rates. But when your issuer sends you a little envelope stuffed full of convenience checks then do take a pass.

What are convenience checks? Well, they look like standard checks, but what they actually do is charge against your credit account at even HIGHER rates than regular purchases, and interest is often calculated immediately! PLUS many of these little check gems add extra fees to the mix — so you’re really giving your credit card company a BONUS by signing one of these guys. If you want to keep more moolah for yourself, then don’t sign your name to any of these convenience checks.

3. Stop paying an Annual Fee

Don’t you love that time of year when your credit card company bills that pesky annual fee directly to your statement? Wheeee! If you’re paying an annual fee for the privilege of charging in plastic then maybe it’s time to switch your credit card.

Many “premium” gold and platinum credit cards charge big annual bucks — money that could otherwise be used to pay down debt or saved for something that brings you real value. Since there are several no annual fee credit cards on the market, consider making the switch to save some big cash. After all, you do have the power to stop paying that “annual fee” if you so desire.

4. Don’t ever “Skip a Payment”

It’s that time of year when even modest holiday spending can add to an existing credit card balance, and the credit issuers know we’re a little strapped in January when it’s time to pay the piper! So if your credit card company makes you the offer to “skip a payment” then run for the hills and just say, “NO!”

Skipping a payment may seem like a deal, but think again. Not paying your minimum balance could hit your credit score, increase your interest rate, and most certainly stretches your payments over a longer term thus increasing the amount of interest you pay! Yuck!

Need convincing? Try this simple Credit Card Calculator to see how long it will REALLY take to pay off your balance!

5. Be wary of “Low Introductory” rates

So you’re minding your own business when a letter lands in your mailbox advertising a super low introductory rate on a new credit card. Since you’re carrying a balance on your current credit card with a 19% interest rate, how could this gift from the credit card gods not be a win! Well think again!

Credit card companies love to offer low teaser interest rates on newly issued cards — it’s how they make money after all! If you tend to carry a balance, this kind of offer may save you money. But if you’re not careful, these enticing low “introductory rates” can come with some expensive surprises, for example:

Lose the interest-free period on new purchases by skipping a payment or not paying off the whole balance! Do this and you might pay the regular (or higher) rate!

Add to your balance and see your payments applied to the lower interest rate balance first! It’s true, most credit card companies apply your payments to balance transfers and cash advances before they apply them to new purchases.

So before applying for a “low teaser rate” offer from the credit card gods do look this gift horse in the mouth. Be sure you understand all terms and conditions and ask the credit card company what transactions the introductory rate applies to, when the introductory period ends, and how your payments will be applied to all balances.

Phew! I think I’ve kicked this can enough for today. If you’ve gotten a kick out of this post then feel free to comment. Many of you guys respond to the email updates — and that’s cool! But to get your voice heard don’t be shy, click to the blog and speak up!

Your Two Cents: Got MORE ways to screw your credit card company? Or maybe you’ve got a credit card tip to kick around?

Your two cents:

  1. Caitlin December 16th, 2009

    On the plus side, I’ve never met a single person who thought that those “convenience cheques” were a good thing.

    That said, like telemarketing, they wouldn’t be around unless someone used them. Hopefully your post will convince “someone” not to use them. :D

  2. Andy Hough December 16th, 2009

    If you really want to screw your credit card company declare bankruptcy. Of course, you would also be screwing yourself but the credit card company would definitely be screwed.

  3. gin December 16th, 2009

    I used a 0% offer for a new card once, no transfer fee, but in the small print it said a purchase needed to be made every month or the rate would increase… of course I didn’t see that till after the rate went up to 18.99%. THEY ARE SNEAKY DOGS!

  4. Kerry December 16th, 2009

    @gin Now THAT tactic IS very sneaky. Wow!

  5. maggie December 16th, 2009

    Thank you for letting us air our views! I am caught in the credit card trap (thanks in part to the Obama administration giving the banks time to really screw us before the new credit card laws come into effect!) It’ll take me a few years more cause of higher interest rates – my First Financial card has raised the interest rate to 24.99% !!!!!! Ouch ouch ouch – this is what you get for never making late payments; never missing payments and being a good customer – gonna make it my New years resolution to get this bill paid off FIRST! (Even if I have to feed the family beans and cornbread for several months LOL)

  6. John DeFlumeri Jr December 16th, 2009

    That is the best article of how not to get taken over the coals by the credit card monsters!

    John DeFlumeri Jr

  7. Doctor Stock December 16th, 2009

    I can’t emphasize how much further ahead I am by getting rid of my “rewards” card that I had to pay for… instead, I replaced it with a dividend card that pays me and to whom I owe NOTHING.

    Nice post!

  8. Christina December 18th, 2009

    Very interesting. Actually a friend of mine thought me how to avoid paying annual fee…haha..just tell them you’ll have it cut-off because you have other offers and other existing cars…those sort of things…Honestly, it did work for me.

  9. Elisse December 20th, 2009

    Would just like to mention- and this is from a bankruptcy atty.- that if your credit card debt goes to “collection”, this means it has been sold off to a collection agency or lawyer for pennies on the dollar- and almost Never includes the paperwork. Which means they can’t do diddly-squat if they take you to court and you insist that you don’t belive you owe what they are claiming and you demand to see the signed agreement and signed charge statements. They can threaten and act scary, but if they take you to court and you formally request that they produce the original signed agreement and signed receipts, and they don’t have it, the case will be dismissed. What these companies are counting on is that you’ll be so intimidated that you won’t turn up in court (in which case they win by default), or that you’ll admit to owing them what they say you do (which often has tremendous interest and fees added to whatever the original balance was). If you respond to a threatening letter (by registered mail), stating simply that you don’t believe you owe what they are claiming and requesting copies of the original signed agreement and receipts, and they don’t send it, you’ll know they don’t have it. :-)

  10. Sioux falls cars December 22nd, 2009

    Even with all this advice and strategies, the credit card companies STILL make tons of money!!

  11. Michael O'Hairy December 29th, 2009

    My Credit Rating was Hooped!
    I signed for a credit card at Costco, and actually got one.
    Use it all the time, and am careful…but a pleasant surprise!

  12. Bill January 1st, 2010

    I love the 0% offers, or at least I used to love them more. It is an arbitrage opportunity. Take their money interest free, stick it in a savings or high interest bearing checking account up to 5-6%, then make the minimum payment until the year is up, then pay off the card. You must be careful and disciplined, but this is an easy way to make some money.

  13. Allison January 13th, 2010

    I think another great way to screw to credit company is to pay it off every month and then use the miles they give to to go to Europe :-)

  14. Meaghan January 13th, 2010

    Good advice! I particularly agree with avoiding credit cards with an annual fee. There are so many card options out there that there is no reason to have to pay to use a credit card.

  15. Stephanie October 14th, 2010

    my credit card has no annual fee, and i get points towards free groceries. so i charge EVERYTHING i can on it, pay it off in full every month, and they give me close to $600 year in free groceries. heckuva deal.

    my girlfriend has one where they just give her cash back on it, and she pays it off in full every month as well. i don’t know if she has a yearly fee, though.

  16. Karen December 23rd, 2011

    It would be nice if you talked about balance transfers also re mortgaging your home… If the balance transfer fee really isn’t cost effective better think again. For instance if you are doing a balance transfer to a 0% card for a specific time, make sure you can pay it of before the dead line our else you can really get caught with heigh nterest.
    Remortgaging your home can cost quite a bit with the appraisal, the amount you pay the agent or company and then the actual fee can be like $3,000 Yikes! We considered doing it with a company and just checking it out cost us plenty! So no to those deals!

  17. It's not debt consolidation January 18th, 2012

    Great article. I use to work for a humongous bank (but now I help people with debt in the non-profit sector :), and it’s always amazing how many people view balance transfers and introductory credit card interest rates as a “debt consolidation” – as though it is a constructive step in the process of getting out of debt. I’ve never seen one of these people put together a plan to aggressively pay down their debt during the introductory interest rate period. They don’t even think of it. Then when you suggest it, they look at you like you just suggested that they jump in the lake.
    Thanks for addressing this topic. It’s important.

  18. Jody February 9th, 2013

    My husband is the king of getting the most out of the credit card companies. MBNA had a 0% cash back offer one year. He managed to convince them to give him a $10,000 limit, cashed the $10k, put it in our TFSA, cut up the credit card, accumulated the interest, paid the minimum payment out of our own pocket (which didn’t matter since it was 0%), and just before it was due, took the remaining balance out of the TFSA and paid them off. We then had left over in the account the minimum payments, plus all the interest, and it didn’t cost us a penny!

    Also, my husband works in the banking industry, so one of his benefits is that work pays for the fee on our platinum travel card. So nice to get 2% of all our purchases back for unrestricted travel, and no card fees to diminish the joy. We use our cc for everything, but have never carried a balance in our lives.

  19. AZBEN February 9th, 2013

    Way back in the days, before the banks started charging you for the use on convenience checks, I bought a Mercedes Benz with one. When that bill came due I used a different banks check. This went on for eight months before I finally had to pay for it, At that time banks were giving 12% on your savings, so the Mercedes Benz actually ended up costing me less. Maybe that’s why they now charge interest on them. It sure was fun STICKING it to the banks.

  20. NANWAN February 9th, 2013

    Jody,,,,,Didn’t your FICO score take a hit when you maxed out the line of credit on the credit card?

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