3 Credit Card Scams

3 Credit Card Scams

It is no secret the world of credit cards is rife with credit card scams. Some of these scams are short lived while others seem to roll on and on. This article will look at 3 credit card scams that seem to be evergreen.

Obviously there are more than 3 credit card scams in the world. I only wrote about these three.

By evergreen I mean they are of the everlasting variety. They seem to attack on an unending basis.

The first of the 3 credit card scams is called a debt suspension offer. The name by itself attracts the attention of even the most robust scam detector. What exactly is debt suspension, right?

While not technically a scam, I am labeling it as one of the insidious 3 credit card scams because it does nothing for you other than putting your bills on hold while you can’t pay them. It is touted as a form of insurance yet doesn’t use insurance companies. It is offered by banks for a fee.

And, it is offered as an extra with your credit card and sold as a way to keep your head above water if you can’t make monthly payments for one reason or another. Let’s say you can’t pay your bills because of a job loss.

While you are out of work, you can’t use your card anyway because it is probably maxed out. Granted no interest is being added to your contract but once you are again employed your contract activates and interest can begin to accrue.

This is a banking product covered under federal law. You can read the law at 12 CFR part 37.

Number two on the 3 credit card scams list is the purchase of credit protection you do not need. In today’s environment credit cards are lost and stolen. The scam is buying protection you don’t need because consumer liability is capped at $50 if the consumer promptly reports the card as missing or stolen.

However, the scare tactic of being liable for $2000, for example, is tossed out as if the consumer would actually be liable. Federal law places the $50 limitation on all such happenings. Your obligation is to make a prompt reporting of the circumstances. Once you make your report, your liability falls to $50.

Obviously you can’t wait. If you report your card, debit cards or credit cards, missing or stolen immediately upon learning it is missing or stolen, you should be covered by the $50 rule. Don’t buy or pay for so called credit protection.

Number three on the 3 credit card scams is paying fees in advance. You get notified by email or regular mail or a telephone call you are eligible for a credit card with some great terms and benefits. However, the catch is you must pay a fee in advance.

The reason they cite is usually you must pay administrative fees or the fee is necessary to either get pre-approved or get approved. Once you pay the fees, you will never hear from these folks again. Your money has been thrown to the wind. You have just become a victim of one of the 3 credit card scams.

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