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Hidden Credit Card Fees

 Hidden Credit Card Fees: The Last Straw for Consumers with Too Much Debt

Hidden Fees

Hidden Credit Card Fees:  The Last Straw for Consumers with Too Much Debt can be hidden credit card fees. When a family is barely hanging on to pay their bills many times they make a payment late on one of their credit card accounts. This can trigger a series of hidden fees that can be disastrous for your financial situation.

That Late fee: The Ultimate Credit Card Trap

Credit card companies seem to be able to get away with financial “murder” if you are late on one of your credit card payments. Late fees assessed against you monthly can range anywhere from $10 to even $40 depending on the situation. However, late fees are the least of your worries when you are slow to pay a credit card account. Most credit card companies have an interest rate that is contingent upon the continued, on-time payment of the credit card and the state of your credit score. Therefore, it is very possible that only one or two late payments on one credit card could not only increase the rate on that credit card but your interest rates on all of your credit cards.

This across-the-board increase of interest rates on your credit cards can be catastrophic when your budget is already tight from your current debt load. Such an increase of interest rates can make your budget simply impossible.

Cash Advance Fees: The Subtle Budget Destroyer

A cash advance fee is a special fee that is charged when you take cash from a credit account instead of making purchases. Although there is little discernible difference between a cash advance and a purchase, the rates in which you were charged for cash advances are set into a separate interest accounting. Where you may only be paying 6% interest for purchases you may be charged up to 20% or more for cash advances. Therefore, cash advance fees can quickly overload a monthly budget by greatly increasing the amount that you must repay your credit card company monthly.

The Balance Transfer Fee Trap

Although many credit cards give interest rate and other incentives to transfer a balance to their credit card, other credit card companies many sometimes charge a much higher interest rate or large fees in order to transfer the balance. If you are consolidating your credit cards or transferring a balance, it is important to note both the fees and the future interest rate. A miscalculation on this part can be very costly and destroy your budget.

Fees On Top of Fees: Your Credit Card Companies Do Not Care if Your Budget Will Not Add Up

Credit card companies many times make what would seem to be a mistake. By increasing fees or interest rates beyond the debtor’s ability to pay, the credit card companies could be “shooting themselves in the foot.”  Where payments in the past were possible, now payments with the new interest rates and fees are absolutely impossible for the debtor.  However, it is very important to note that credit card companies do not care and do not usually have a system to anticipate this overcharging. Many times the overcharging of fees and the increasing of interest rates are the very catalyst that cause credit card holders to be forced to file bankruptcy.

Conclusion: Use Credit Cards Responsibly to Avoid Bankruptcy

Credit card companies operate for one purpose: to make profit off their credit card accounts. It is very important to make a solid plan to avoid getting into excessive credit card debt. Even a very well managed credit card portfolio can very quickly unravel into a mess that may be impossible to rectify without filing for bankruptcy. The best way to avoid unfair credit card fees or interest rates is to either not use credit cards or to use them as minimally as possible.

~Indianapolis Bankruptcy Attorney John F. Bymaster

 HIDDEN CREDIT CARD FEES AND BANKRUPTCY VIDEO

Indianapolis Bankruptcy Lawyer John Bymaster also has a video explaining the different hidden credit card fees.

 

Will I Lose Everything I Bought With Credit Cards?

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Many times our clients ask, “Will I lose everything I bought with credit cards when I file for bankruptcy?”  The answer to this question is “No.”  You will not lose everything you bought with credit cards when you file for bankruptcy.

Generally, you can keep everything that you bought with credit cards when you file for bankruptcy. The reason why you can generally keep everything you bought with credit cards when you file for bankruptcy is because credit cards are usually unsecured debts. An unsecured debt is a loan or other form of debt that has no security interest that can be taken back if you default on the loan payments.

Other loans such as mortgages or car loans are called secured loans because the loan is “secured” with the collateral of your house or car. With these secured loans, the security interest – such as your house or car – can be taken back to help cover the creditor’s losses if you default on the loan payments.

Credit cards, on the other hand, are usually completely unsecured loans. That means that the creditor is only extending you a line of credit on the credit card and they do not desire to take a security interest in anything that you purchase. It is simply an open line of credit that you’re able to use however you desire: as long as you abide by the terms of the agreement.

Credit cards cannot usually “take back” your purchases. Therefore, you can usually keep anything that you have already purchased with the credit card if you default on your credit card payments. If you are bogged down with excessive credit card debt, you may need to consider your options for debt relief. If you have any questions about credit cards or any other matter relating to debt relief, give her office a call.

~Indianapolis Bankruptcy Attorney John F. Bymaster