Credit Cards

Avoiding Credit Card Scams

Credit card scams are seldom the work of the companies supplying the credit cards themselves – although there are many instances of card interest rates so high as to be considered a scam, especially at the credit-repair and poor credit end of the card market.

With any credit card it’s important to understand annual fees, interest rates and charges as these can be higher than expected especially if any payments are missed.

Because of the lifetime value a credit card customer brings to the issuer it’s not uncommon to see 0% interest offered for extended periods on new card balance transfers. Whilst there are some excellent deals to be had, remember this is a short-term solution and ensure you’re aware of the interest rate that will come into effect at the end of the offer. Also be aware that missing any minimum payments during the offer can result in the offer being immediately withdrawn.

High interest rates and hidden fees apart, the credit card industry is highly regulated – so the only scam you’re likely to come across is actual credit card fraud or identity fraud being used to take out credit cards in your name.

When and if it happens, it’s how your card issuer acts next that matters – are they quick to refund balances in fraud cases? Will they remove any notes on your credit report speedily – and will you ultimately be left damaged or out of pocket from the experience?

So how can you protect yourself from credit card scams?

Incorporating a few practices into your daily routine can help keep your cards and account numbers safe.

• Check interest rates, fees and charges in detail before taking out a new card. Read ALL the small print on any special offers as this is what catches most consumers out.
• Only use legitimate and trusted companies, such as those we list above.
• When it comes to fraud, don’t give your account number to anyone on the phone unless you’ve made the call to a company you know to be reputable. If you’ve never done business with them before, do an online search first for reviews or complaints.
• During a transaction, keep your eye on your card. Make sure you get it back before you walk away.
• Open your bills promptly, or make a habit of checking them online often — Report any questionable charges to the card issuer immediately.
• Notify your card issuer if your address changes or if you will be traveling.
• Call the card issuer as soon as you realize your card has been lost or stolen. Once you report the loss or theft, the law says you have no additional responsibility for charges you didn’t make.

And most importantly, remember for all their convenience credit cards are a very expensive way of borrowing money. Try to pay your balance in full every month and do not buy items you otherwise couldn’t afford.