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Insight and Tips on Credit Cards

By M. Stan Herring

Our friend Denise Richardson has a guest post on her blog providing insight into the credit card industry. The source, and author of the blog post, is Scott Taylor, who was in the industry for 20 years.

Taylor feels that credit cards can be very useful when used properly, but the average consumer doesn't have enough education about how the credit card industry works. Banks know that most people will only pay the minimum monthly payment, and will use high interest to gain profit.He uses the example this example:

If you have a balance of $5000 with the average interest rate at 13.89% and a monthly payment of $150- If you NEVER used the card again and made every payment on time and constant amount, it would take you a short 3.5 years to pay that balance off..

Taylor also warns against exorbitant fees. He warns the consumer to be on the lookout for excessive fees that are disguised as processing fees to complete a transaction, such as balance payment over the phone...or online.

Here is an insider tip, if your credit card company charges you a fee to pay your account online- you need to fire that company immediately. They are gouging you for fees that are absolutely not necessary.

He also warns of the dangers of "re-pricing." Taylor says that companies will alter interest rates of nearly everyone every year. If you have debt with another creditor, delinquent payments, or have had identity changes you're interest rate will very likely go up.

If you have had any problems with credit card companies, feel free to contact us.

Full post as published by Alabama Consumer Blog on March 31, 2009 (boomark / email).