30 July 2005

Dodgy Credit Card Practices 1

Credit Card companies in the US engage in a number of dodgy(*) promotion schemes. This is the first one I want to warn/complain about. Each month I get three pre-printed checks (cheques) made against my credit card with a covering letter suggesting:

It's easy to use your checks and ...
* Have cash at your fingertips.
* Consolidate other bills into one lower monthly payment
* Treat yourself to the best summer yet by taking that dream vacation or creating your own backyard oasis!
... PS Use these checks to make your summer unforgettable!

I asked Ariel (14) and Eric (11) if that sounded like a good idea. They immediately said, "But you have to pay it back!" Exactly! Using these checks would certainly make your summer unforgettable - "Oh no! That was the summer I am still paying off years later!" Also, the fine print says that using these checks involves a charge of 3% for each transaction (min $10 max $75). Yes - make your summer really unforgettable.

Every month I get these checks from all my credit card companies. Every month I shred them immediately. No wonder people get caught in the credit card trap!

Never use your credit card if you can't pay it off in full before the due date. If you miss the minimum payment you are also slugged with a penalty amount of between $25 and $75, if you muck up and go over your credit limit or go overdue you may be slugged with penalty interest of over 29% p.a.

(*)The word dodgy is a great Australian word meaning one of two things: 1:unreliable, faulty, defective (i.e. the car was dodgy = the car is a lemon). 2:cunning, artful, deceptive (i.e. Politicians are normally dodgy). We are using the 2nd definition here.

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