Secured Card Rip-Offs

Secured credit cards are the last resort for individuals with no or bad credit to start building a credit score. It is also an area that is extremely abusive. Credit card companies prey on those who are desperate. First what is a secured credit card? It is a credit card for those who don’t yet have a credit card or for consumers who want to rebuild their credit scores.

The credit card company is willing to take the risk because the consumer has to put down a deposit that covers the entire credit limit. For instance, for a $ 1,000 credit limit card, the consumer has to put down a $ 1,000 deposit.

Unfortunately, credit card companies have really preyed on those who need these cards. Not all major banks issue them. Much of the time, you will find smaller banks and companies that issue these cards. Let’s take a look at an example of an abusive situation.

I had a listener contact me about a concern she had with a credit card that her soon just received. After applying for this credit card over the phone, her son received the card and his first bill.

The statement for the card that he has never even had in his possession had a bill on it for $ 213.19. The credit limit was $ 500.00 and had a 23.99% interest rate. The charges were as follows:

Annual fee $ 50.00
Account Origination Fee $ 100.00
Rewards Program $ 39.95
Interest $ 3.19
Overnight Delivery Fee $ 20.00

Plus there is always a .50% minimum fee if there is any balance. So you are looking at least another $ 6.00 a month in minimum interest charges if you use the card.

Now, how could this individual figured out that this bank was a rip-off ahead of time? The answer is real simple. With the help of the internet, you can use any search engine and find out just about anything that you want to know about a company when unethical behavior is involved. Most of the time, that type of thing gets written about on web-sites.

So, if you Googled Cross Country Bank, you would have found the following:

“Cross Country Bank, one of the nation’s largest sub-prime credit card issuers, was ordered to pay approximately $9 million in restitution and penalties for engaging in fraudulent, deceptive and illegal practices. “

You would also have discovered that Cross Country Bank is still in business and has changed their name to Applied Bank. After researching Applied Bank, I found these comments:

“They keep putting fraudulent charges on my account. They keep putting me over the limit and have been charged hundreds of dollars.”

“This bank seems to want to ruin my credit, but I will not let them.”

“When this bank accessed me an over the limit fee and could not properly explain why, I got very suspicious. I found out that this is an ongoing practice for this bank.”

“My credit card company charged me an over limit fee of $32 which put me over my limit by $15. Hmm... without the charge I would not be over my limit.”

“…..this credit card company charges an extra 29.99% on cash advance even though no cash advances were never made.”

If you are going to get a secured card, makes sure you research it over the internet first. Then look check the fees and read the fine print. After you receive the card, watch the statement like a hawk and make sure that they are not trying to pull something over on you.