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© Copyright 2004, IRED.com, Inc.
Don't Touch Credit Cards With A 10-foot Pole.
no, Make That A 20 Foot Pole
By W. J. Fontenote
Credit Cards are a modern marvel. Where else can you get easy money of $1,000, $2,000, $5,000, or much more without going in person to a bank or other lending agency. In fact the Credit Card companies inundate you with offers all the time if you have a good credit rating. America is a great country.
But wait.
There is a huge downside to credit cards. First, the interest rates are very high and can change at a moments notice. Many cards also have variable rates, which can go up at any time. You never know from month to month, what your payments are going to be.
Second, there are many hidden fees on credit cards. These fees kick in if you're late with a payment, go over balance, get cash, or transfer balances from another credit card. The worst part of this situation is that if you are late or over balance, they can increase your interest rate to the highest possible. This can be as much as 22% or more.
Another huge problem with credit cards is fraud. Consumers lose millions of dollars a year from credit card thieves. While theft is the most obvious form of fraud, it can occur in many ways. A common way is for the thief to get your credit card number and use it online or by phone. There are many ways for a thief to get your number without you knowing it. One way is for the person to go through your trash to find receipts or carbons that you have thrown away. Then he has your number and other information about you. Be sure and shred all paperwork associated with credit cards.
Ways to guard against fraud:
- Sign your cards when they arrive.
- Keep a complete record of your account numbers, their expiration dates, phone numbers and addresses of each company in a safe place.
- Watch your card during any transaction. Get it back as soon as possible
- Always void incorrect receipts and destroy carbons.
- Save receipts to compare with billing statements.
- Open your credit card bills quickly and reconcile your account monthly.
- Report any strange charges promptly and in writing.
- Notify card companies well in advance of any move so than your statements don't get misplaced.
- Don't lend your card to anyone.
- Don't leave cards or receipts lying around.
- Don't sign any blank receipts
- Be very sparing about giving out your account number over the phone
If you lose your card, you should immediately call the issuer. Call the toll free number and give them the complete information on the circumstances of the loss. If you do this quickly enough, then you have no further responsibility for any unauthorized charges on the card. No matter what happens, your maximum liability under the law is $50 per card.
The following is my recommendation for credit cards:
You should have only one card to be used for room reservations, car rentals, or emergencies. Charge small amounts each month so the insurer won't cancel you for non-use. Pay almost all of the charges each month, but leave a small amount to pay so a very small amount of interest is due. The only reason to do this is to keep the issuer from canceling you.
If you will follow the above suggestions you will eliminate most of the horrible things that can happen with credit cards.
GOOD LUCK
W.J. Fontenote
William Jarrell Fontenote succumbed to cancer on February 12, 2006. Rest in Peace, Beloved Friend.
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