This is a blog about credit card scams. Not the kind of scams where someone tricks you into giving out your credit card info and not the kind of scams someone uses your card without permission. I'm talking about real credit card scams, the kind that only the credit card issuers could get away with.

If you are old enough you might remember a time when charging more than 10% interest per year was considered loan sharking. In other words only the Mafia would charge 10% or more and risk federal prison for charging those crazy high rates. Today it is hard to find a credit card company charging less than 10% in fact most credit card companies charge such high rates and fees for everything that they would make the gangsters in the Mafia blush.

First take a look at the fees the credit card companies charge. If you are paying an annual fee to have a credit card, then throw away that card and close the account. There are plenty of no annual fee cards available. Now lets say you go over your charge limit, you'll be paying a $39.00 "Over Limit Fee" plus they are now going to raise your rate. Here is the funny thing; most of us accept that. Well why wouldn't we accept that, after all if I went over my limit then why shouldn't I pay the "Over Limit Fee"? Let me explain it this way, there shouldn't be an "Over Limit Fee". Think about it, do you calculate every purchase that you make and know how close you are to your limit with every purchase you make? Of course you don't have a running total in your head and the credit card companies are counting on this; because sooner or later you'll go over the limit and bingo they score an easy $39.00 for nothing. For nothing I say because they let you go over your limit. If the credit card companies didn't want you to go over your limit they would stop your card from making additional charges once you reach your limit but they don't stop you. Had they stopped you from going over your limit then they couldn't charge you the $39.00 "Over Limit Fee" or raise your rate for going over the limit.

To quote a former first lady, "Just say NO!"

When your credit card company sends you a bill and you see an "Over The Limit" fee just call the company and tell them that you didn't know you were over your limit and that you'd prefer that they don't allow you to go over the limit.  Then ask them to remove the fee and lower your rate back to where it was before.  Almost every credit card issuer will agree to not only remove the fee but they will also lower your rate.  Most issuers will even set your card to stop going over the limit.

You only have to ask them to do this and they almost certainly will.  The sad truth is that most people will never ask and will feel like it is their own fault that they went over limit and will pay the over the limit fee that they feel they deserve to pay.

You are being scammed by the credit card company, stop feeling guilty, stop being a victim, call them and demand that they fix this over the limit problem that they caused as a trap for you.

Here is a new scam the credit card companies are using while they blame the economy. They will send you a letter and if you are like most people you will see that the "Change in terms and conditions" is a few pages long so you'll assume that whatever it is the bank isn't going to rip you off so it must be ok and you'll throw it away. That is what most people do and the banks thank you for your trust. Without you trusting banks and credit card issuers they couldn't cheat you as badly as they do. The Change In Terms and Conditions letter that you may have thrown away often tells you that they are going to raise the interest rate on you by several percentage points. Well you may think that if they are going to do that then there is nothing you can do about it anyway. There is a way out of this rate hike. You simply have to call the credit card company and decline the new rate. Of course then they will turn off your card so that you can't use it anymore but at least your balance stays at the lower rate. Only keep the credit cards that don't want to raise your rate.

I own an advertising agency and I help business owners to make more money by effectively advertising.  I don't like to see business owners getting ripped off by credit card companies.  The federal government has lowered interest rates to the lowest rates we have seen in years.  There is no justification for credit card companies to charge such high rates of interest.

We help business owners with brochure design and other services needed to help make their business more successful.

Please contact us if you are looking for a Fort Lauderdale website designer or a Miami website designer.  We also have clients all around the country and around the world.

I wasn't going to name names and just say "credit card companies" but why shouldn't I name them.  CHASE was the first one to raise my interest rate to obscene new highs.  We often shop at Macy's.  As a business owner my business suits come from there, my wife's clothing comes from there.  In fact we are such a good client of Macy's that they have given us their Black card.  OH but that is not all they gave us; they have given us a 27% interest rate.  How can anyone carry a balance on a credit card with a 27% interest rate? 

Just this week, in the middle of August 2009 I got a letter from Citibank, the issuers of my Sears credit card.  Here is what Citibank has to say before they tell me that my APR is going to 25.24%.  Don't ask about the cash advance rate, it is even higher.

"Dear Valued Customer,

Currently, the credit card industry is facing unprecedented market conditions. As a result of this challenging business and economic climate, we are making changes to your Card Agreement.  We value you as a customer, and we're working hard to preserve the broad availability of credit."

Citibank (South Dakota), N.A.

Of course they thank me because I'm a valued customer.  Then they drop this bomb on me:

"We are increasing your variable APR for regular Sears and External purchases.  Your regular Sears and regular External purchase ANNUAL PERCENTAGE RATE will equal the U.S. Prime Rate plus 21.99%.  As of July 1, 2009, this APR is 25.24%."

Wait didn't the Federal govenrment drop interest rates to some of the lowest rates we have seen in many years?  Why would Citibank add a charge 21.99% ON TOP OF the U.S. Prime Rate?

Hey I have nothing against them making money but doesn't it seem that the only people who can opt out are well off?  The way you opt out of paying 25.24% is to close your account and never use the card again and just pay it off.  So in effect they are getting rid of customers who refuse to pay 25.24% and thereby increasing their profits to record highs.

Most people these days aren't using their credit card for vacations, they are buying gas and food.

American Express also sent me a letter raising my rates.  They aren't raising the rates as high as the shameless Citibank rate of 25.24% but it is way above 10%.  So what did I do to anger American Express and make them want to raise my rates?  Nothing!  I've reliably paid my bill each month for the many years that I've had this account.

Are you tired of this form of bank robbery?  Forward this message to everyone you know and ask them to send a letter to the banks.

This may surprise you but in the United States there is no limit on what interest rates credit companies can charge you. So if they want to raise your rate to 50% per year or per month only you can stop them by getting rid of your credit cards.This has no doubt had an impact on the Mafia loan sharking business.

Maybe it is time to demand government protection for loan sharks!

The Mafia at least had some limits on what they would loan shark money at but the credit card companies can charge you whatever they want. So it seems to me that the Mafia needs government protection from the unfair competition it faces from banks that are able to charge any interest rate they want on credit cards.

Another thing worth noting is that within the past two weeks I've checked the three big credit bureaus and found that I have no negative reports. My credit score is an impressive 698 and it would be even higher if not for one mistake I made thinking it would help me. I thought it would be best to get rid of any credit cards that I don't use. My thinking was that if someone stole my identity they'd have a lot of credit cards to use that I had forgotten about. So I canceled these cards thinking that this would also help me to have a better credit score. To my dismay I found that although 698 is very good closing unused credit cards worked against me.

Here is how it works. Let's say that you have 10 cards and have a $10,000.00 limit on each one. Now let's say that you only use one card and it has a $6,000.00 balance. The credit bureaus would say that you have $100,000.00 worth of credit but have only used up $6,000.00 of that meaning that 94% of your credit is unused so if you want a new loan for a car you are seen as a good credit risk. However, get rid of the nine cards you haven't even used and now you only have $10,000.00 worth of credit and you've used up $6,000.00 so you only have 40% of your credit remaining so you are not looking so good anymore.

By thinking I was doing a good thing in getting rid of unused credit cards I caused my credit score to drop to 698 which is still very good. Remember I have no negatives in any of the three credit bureaus. Yet I can't get good rates on credit cards any more because I closed unused accounts.

Another option to try to end this problem is to complain to the President of the United States. Please tell our President that you are tired of being abused by credit card companies. If you aren't sure what to say just include a link to this blog and ask the President to check it out. Click to tell President Obama.