Stay Informed and Don't Fall into the Trap of Credit Card Companies

Credit card companies are real businesses and they are here to make profitsfrom us. The traps and tricks they use to make profits are buried in fine prints.Thriving on a persons inability to repay his monthly balances on time, creditcard companies fill up their coffers. Staying informed and using the creditcard wisely is the only option that will help a credit card holder survive thisonslaught. In this article we look at few things credit card companies use toget money out of your pocket.

Cash Withdrawal

Cash withdrawal by using credit cards attracts huge APR's and a cash withdrawalfee. The APR's can go up wards of 22% and can jeopardise your financial situation.Not just cash withdrawal from ATM's, if you play poker online and fund yourgambling payments with your credit card, get ready for a surprise, you willbe charged an cash withdrawal apr- shocking! Isn't it? Credit card companiessend you leaves of checks to 'facilitiate' easy cash withdrawal. Use them andyou are heading for a good high APR for cash advances. The message is clear-keep a check on using credit cards for cash advances.

Your credit limit increased

This very fact makes some people jump in their seats with joy. Wow! Now I canborrow more- this statement rings in their heads? But is it all that rosy? Remembercredit card companies by increasing your credit limits want to drive you ina kind of buying frenzy, so that you borrow more and pay more interest to them.It is a trick, to earn more revenues. Don't get lured in and spend recklessly.Let them increase your credit limits, promise yourself that you will alwaysuse the credit card wisely.

The APR Drama

Nothing is much more complicated as the terms and conditions on APR rates thatcome with a 0% intro APR credit card. The fine prints usually describe differentAPR tiers for purchases, balance transfers and cash advances. Also, the benefitsof 0% APR vanish as soon as you default on your repayments and regular highAPR becomes applicable. The credit card companies are particulary strict aboutit. Second trap the credit card company use to get more clients is that theyadvertise monthly rates instead of APR for example, a monthly rate of 1.5% canlook very attractive, but translated into APR terms it is a whopping 19.5 %.

So, you get the picture. Who will stay safe from credit card companies clutches?The one who uses his credit card wisely, and always reads the fine prints carefullybefore accepting that plastic.