sneaky credit card tricks

Retroactive Rate Increase

This is the No. 1 practice credit card customers complain about. Even if you signed up for a low-interest card, many banks reserve the right to raise your card's interest rate at any time. They can charge you the new, higher rate not only on new charges but on your existing debt as well. It's a real bait and switch.

Tricks to Make You Pay Late

These come in many varieties. If you’re late you’ll pay a hefty fee and your interest rate may go up. Check each statement carefully and pay your bill as soon as it arrives.

Changing Due Dates – Your bill will not be due on the same day every month.

Early Due Dates – Bills may be due just a few days after you receive them.

Weekend Due Dates – If your due date is on the weekend and your payment arrives on the date, it
won’t be processed until Monday and you’ll be considered late.

Morning Due Times –Your payment may be due at 9am on the due date, not 5pm.

Tricky Interest Calculations

For some cards, you can pay interest on purchases from previous cycles.

Say you made a $100 purchase, but you only paid $90 of it off. Instead of being charged interest on the $10 remaining, the card company takes the opportunity to charge interest on the entire $100, because a portion of it was not paid in full.This is known as double cycle billing. Look for a card that uses the “Average Daily Balance” interest calculation method.

Retroactive Application of Higher Interest Rates

To make things worse, if your interest rate increases, they can apply the higher interest rate to the entire existing balance, not just to new charges.

Credit “Protection”

Services like this may sound good, but they’re usually useless. The fee for the service likely exceeds the minimum payments it would cover if you became sick or lost your job. Avoid add-on products like this.

Consumers have been complaining about these practices for years. In December, the Federal Reserve passed new rules that will help curb them, but those rules don't go into effect until July 2010.

The Obama administration and Congress may now be more likely to force the credit card industry to make swift changes, because these are the same banks receiving billions in government bailout funds and Americans are hurting right now.