Know Your Consumer Rights When it Comes to Credit Cards

Boy taking care of his shoes

Some 3 billion pieces of mail are sent to U.S. consumers each year from credit card companies, according to 2015 statistics highlighted in Business Insider. That's a lot of marketing to wade through. And, as you know, it's simply not enough to pay your balance in full and on time. Credit card companies are looking for ways to penalize you for paying your balance off. They can cancel a card if you are not using it, which can hurt your credit score. Did you know they can raise your APR on one card simply because they found out you were late on a payment to another? Did you also know that the fine print on contracts states they can increase your APR at any time they want, for any reason?

Fighting back doesn't take one borrowed dollar. Here are ten ways to turn the tables on credit card companies.

Understand when and where the credit card debt cycle begins

Credit card companies start recruiting before skepticism or experience develops; college students being a prime target. With education costs and student loans at an all-time high, youth are the perfect profile of a needy, unsuspecting victim. If fact, a large number of college students have reported they didn't even know the credit being offered to them wasn't free of charge.

According to a 2016 survey by credit scoring agency Experian on college students and credit found millennials felt “let down” by the preparation they had received so far to manage their credit life responsibly and confidently. Here's more:

  • 40 percent rated their current financial security as poor or fair
  • 53 percent feel that being debt-free is an attainable goal in today's economy

    Pay off your credit cards

    The best thing you can do for yourself and your debt is to pay it off and never tango with credit card companies again. There is just no substitute or excuse for taking up the financial reins of your own life. This will give you the greatest power, as well as let you help others later who have fallen into the trap.

    Send back any credit card offers or additional debt-inducing advertisements

    You know all those little ads that are mailed with your bill? Stuff them in your bill's return envelope to send them back. Let the credit card companies be responsible for their own paper waste and noise. Get calls on the phone from credit card companies? I like to put them on hold and leave them there for an indefinite amount of time.

    Destroy all your credit cards — emergencies call for cash, not plastic

    Credit cards are not a necessary part of life. Although credit cards — when used wisely — can render a user cash-back and other reward benefits, you don't need to have a credit card in case of an emergency. You need to have $1,000 cash in a high-interest online savings account like ING Direct that issues debit cards so you can have the money in a snap.

    If you choose to keep a credit card, don't be a debt recidivist

    Make it a goal to always keep your credit utilization under 30% — this will help your credit score. Better still for life in general, avoid carrying any credit card debt month-to-month. Unless you are charging more than you can afford or are paying off a big-ticket item, there's not really a reason to. And if you are using credit to finance larger purchases, be very aware of when any zero percent APR window ends. Even if you only have a small balance left, the fine print allows the credit card companies to charge you interest on the full balance and from the day you made the purchase.

    Stop the credit card companies from contacting you

    If you go to the National Do-Not-Call Registry, you can register so you won't get credit card offer calls. To stop your mailbox from being filled up with offers, contact OptOutPrescreen.com.

    File a complaint against the credit card companies

    Consumer Reports advises consumers to register a complaint with your state attorney general. (Contact information is available at The National Association of Attorneys General.) Also lodge a complaint with the Office of the Comptroller of the Currency, which you can reach by phone at 800-613-6743. If the OCC doesn't regulate the card issuer, it will help you find the agency that does.

    Realize revolving balances support credit card corporations and their causes

    From 1990 to 2004, almost $8 million from credit card companies was contributed to both political parties. Aside from achieving personal relief and control over your financial life, another value-based and entirely beneficial reason to pay off your credit cards is to stop giving funding to organizations who will not use your money to lobby for laws on your behalf. In a sense, when you use credit cards, think of yourself as inadvertently giving money to a cause you might (or more likely might not) support.

    Remember, penalty and non-penalty fees (late fees, interest rates) have made up a whopping one-third of total revenue for credit card companies.

    Support government regulation for credit card companies

    While there is still no federal law that caps credit card interest rates, the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 helped to tip the balance more in favor of the consumer. Changes include a 45-day notice before changing your interest rate and greater disclosure about how long it will take you to pay off a balance if you only make the minimum payments.

    Vote in the next election

    I'll give you the same simple speech my father used to give me when I was younger and disconnected to the process: “Voting is not a choice; it is your civic duty.” If you dislike laws and regulations, get involved in the political process.

    Author Katrina Ramser is a freelance writer who contributes to various websites, newspapers and magazines.

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Thomas
Thomas
11 years ago

While I am definitely a fan of being very careful with credit cards and NOT using them until your financial life is in order (if indeed, you are like most of us and have had debt issues that you have worked on in the past or are still working on now), this article was a little extreme in my view; credit cards are not evil- the companies just are out to make as big a buck as they can, and a lot of people are just too lazy to prevent it. How about a tip that SHOULD have been number… Read more »

Paul
Paul
11 years ago

I agree. We don’t need more ‘regulation’, people just need to read the fine print.

Credit card companies are loaning you money. They set the terms of repayment. If you don’t like those terms, don’t borrow the money.

Pretty simple, really.

Credit card companies aren’t evil.

Ron@TheWisdomJournal
11 years ago

I had a friend that would take the postage paid envelopes that came in the offers, tape them with clear packing tape to a stack of phone books, and mail them back … just for spite! Those little “reply cards” are weighed before the company can receive their mail and would cost the company dearly. He worked at a large office building and had an almost limitless supply of phone books.

April
April
11 years ago

I agree with Paul and Thomas–we don’t need more regulation, and despite a veiled attempt to come across as nonpartisan, this writer’s agenda is obvious. Where is the personal responsibility? Why do we always look to the government when we get ourselves into a mess, instead of doing the right thing from the start? Hmm…sounds just like the financial bailout situation we’re in right now. My husband and I paid off over $14000 of credit card debt this year, and I never thought that the big, bad credit card companies were to blame. We got ourselves into it, we knew… Read more »

MatthewL
MatthewL
11 years ago

One additional thing about voting is that you should become an informed voter first. Just blindly casting a vote is not any better than playing a game of pin the tail on the donkey.

wordwych
wordwych
11 years ago

I love the idea of mailing phone books back to the CC companies!! That is too funny. Years ago, I started stuffing those offers into the postage paid envelopes, along with whatever paper flotsam that I could conveniently lay my hands on (usually those annoying cards from magazines, or sales circulars from the newspaper)and mailing them back, but I never thought of shipping phone books back to the companies. 🙂 I especially like #10 on this list. I’ve always felt that if you don’t vote, you have no right to gripe about things you don’t like and no right to… Read more »

Justin
Justin
11 years ago

I’m also a little disappointed in the political linking. There are other parties in the US than the Democratic and Republican! The Constitutional, Green, and Libertarian parties all have large followings. And with the Democrats and Republicans actually effecting very similar political and fiscal policies despite all the rigmarole, and votes often described as being for the less detractive of the two major candidates, Americans need to know that they have a choice.

Either give fair linking to all, or link none of them…

April
April
11 years ago

Justin–nah, the writer just wants us to look at two links and then pick the candidate “who has an agenda for reform credit cards.”

Never mind those of us who aren’t for big government, or who aren’t Democrat or Republican.

J.D.
J.D.
11 years ago

Folks, I’ve removed the paragraph with political linking at the end. I think Katrina’s point is made without it. You all know how to get involved.

Two other points:

1. Yes, reading the fine print is important and should definitely be on the list.

2. I don’t know how I feel about additional regulation. Credit card companies may not be evil, but they do some sneaky stuff sometimes, and their ultimate goal is to get people hooked on credit. Obviously individual responsibility is key…

Curt
Curt
11 years ago

American credit card debt: $800 billion.

That is larger then the bailout package. American needs a complete culture change to turn away from credit.

Lauren
Lauren
11 years ago

Another caution: we pay our CC balance in full and on time every month and never carry a balance. I noticed that they were still charging us interest. I realized that it was because their billing cycle is slightly longer than 30 days, I’m sure on purpose, so they can charge interest for a few days on the balance even if you do pay the entire bill. We started paying twice a month and now never get charged interest. I personally like using a CC because it’s an easy way to track spending and I’ve actually gotten back cash back… Read more »

ThatGuy
ThatGuy
11 years ago

@JD

“Their ultimate goal is to get people hooked on credit”

No, their goal is to meet a need of the consumer for credit and charge whatever the market will bare. That is the beauty and evil of capitalism, can’t have one without the other.

Further, that type of rhetoric fosters a victim’s mentality, which does not help anyone. Your website empowers people to change their habits and a victim’s mentality goes against what I think you want to stand for. Like others have said, they are a business and they only exist because there IS consumer demand.

-ThatGuy

Richard
Richard
11 years ago

#4 — I keep my cash in a money market account. Money market accounts as far as I know can’t have debit cards tied to them, at least mine don’t. Having a credit card gives me instant access to $5000 (my credit limit) in emergency funds while keeping my cash in a higher interest bearing account. I also enough cash on hand to get past any total emergencies where there’s no electricity or whatever. #9 — Caveat Emptor and all that, but regulation can also be helpful. Regulations in the meat packing industry made buying meat a safer proposition (http://en.wikipedia.org/wiki/The_Jungle).… Read more »

J.D.
J.D.
11 years ago

@ThatGuy I can see your point, but I disagree regarding motive. Yes, capitalism has its bright spots and it has warts. Yes, credit cards meet a need for many people. Yes, one of the primary aims of GRS is to empower readers. No, I don’t think anyone likes a victim mentality. However, I continue to believe that credit cards do structure their business in such a way as to “hook” consumers, and to make as much money as possible, often in ways that border on slimy. (Or which are overtly slimy.) See my past post on the secret history of… Read more »

J.
J.
11 years ago

Definitely second the calling companies to ask them to dismiss fees–I’m a pay off your balance every month kind of person, but there have been two times in about ten years that I missed my payment by one or two days. Called them up as soon as I realized my error and they removed the late charges, in part because of my good record (?), maybe because I asked nicely. Never hurts to ask. It’s not even the $30-40 dollar fee, which is outrageous, it’s maintaining that good credit record.

Yer
Yer
11 years ago

I am concerned about point #8. I pay on time and in full every month, so I avoid late fees and interest. But since the credit card company gets a small percentage of every transaction, I am worried that I am
1) Taking money away from local businesses
2) Causing higher prices for myself so that local businesses can recoup that percentage the CC companies get
3) Putting money into the hands of big businesses with their own agendas (as the original poster mentioned)

frugal dad
frugal dad
11 years ago

I used to work for a credit card processor and can say that without a doubt they work hard to make credit cards more attractive. However, as many have pointed out, there is an element of personal responsibility required for their use. If you know “financial crack” is bad for you, don’t try it–you just might get hooked.

Deb
Deb
11 years ago

Know what’s interesting…if I get near my limit on a card, they raise my available credit. I just didn’t pay attention at first, and next thing you know they’d raised it $2000 without asking me if I wanted it raised. Eeks, I don’t want access to as much credit as they kept giving me. Calling them and telling them to cap your credit limit will stop this process. Remember, even if you aren’t using the credit, it still shows as open to you.

jim of Blueprint for Financial Prosperity
jim of Blueprint for Financial Prosperity
11 years ago

Solid tips, especially #10, the registration deadline is coming up soon so everyone should register to vote!

ThatGuy
ThatGuy
11 years ago

@JD,

Two-Cycle Billing. For those readers that like tedious examples they can look here http://allfinancialmatters.com/2006/12/12/how-two-cycle-billing-works/.

I heard of this before, but I never looked into it due never being dinged. Seems like it is impossible to NOT pay finance charges with a two billing card.

I will say that I am slowly going insane with the amount of CC offer I get. I average over 5 a WEEK.

Too conservative to use the opt-out website though.

P.S. Was it a discover card? So I know what to avoid in the future.

-ThatGuy

Kevin B. O'Reilly
Kevin B. O'Reilly
11 years ago

This article is, frankly, idiotic. No. 1: The writer uses “average” numbers of debt, when the median debt is far lower. Most credit-card users carry no balance. Most that do carry debt have less than $2,000. Only about 1 in 20 credit-card users carries balances of more than $8,000. This is the 20/80 rule in spade here. No. 2: “The best thing you can do for yourself and your debt is to pay it off and never tango with credit card companies again.” Nooo. Maybe, that’s the best thing *she* can do because she has determined that easy credit is… Read more »

Chicago Gal
Chicago Gal
11 years ago

I just wanted to mention that point number 3 is a bad idea. (In theory it works but in reality not so much) I used to send back those signup cards in magazines and other free business reply envelopes to make the spammy credit card companies pay for the postage of all their garbage. The problem was that they actually signed me up for some of the magazines without any of my information filled out or my consent. I had to cancel it and explain I never subscribed and that was a pain. Now I still get renewal notices from… Read more »

senderbackers
senderbackers
11 years ago

Actually, number 3 is my favorite. My wife and I started a blog where we send back those envelopes. Sometimes we even put ad-inspired artwork in. The key is to remove the customer locator codes from some of the envelopes and to also NEVER send back any identifying information/forms. We have a lot of fun with it. The way I see it, I am supporting the economy in these tough times by providing people at the post office and credit card companies with jobs! On the flip side, we pay off our credit card each month. We only put things… Read more »

April
April
11 years ago

“I recognize that credit card companies are in business to make a profit. I recognize that consumers need to take responsibility for their choices. But I also believe credit card companies do their best to rig things against users, to create traps for the unsuspecting, the ignorant, and the weak.” Very true. And when you decide to use a credit card, you are choosing to play their game. You can benefit if you are responsible and well-informed (I almost have enough miles for two tickets to Europe), but never think that the credit card company is looking out for your… Read more »

Jon
Jon
11 years ago

@ThatGuy, That opt-out program really does work. If you’re concerned about using your credit card on a web site, you can also do it by phone (1—888—5OPTOUT). I did this many years ago & it almost completely stopped the credit card offers (and really cut down on catalogs & other random junk mail too). The only offers I get now are from companies or organizations that I already have some sort of account or membership with, and those are very rare (except for American Airlines frequent flyer program – I haven’t flown in years and I still get a credit… Read more »

kdub
kdub
11 years ago

I signed up to opt out of pre-approved credit card offers and other junk mail, and now I don’t get ANY mail for 3 or 4 days at a time, it’s really strange. But since I pay all my bills and bank online, and nobody writes letters anymore, that’s what happens. And I agree with some of the points in this article but as others said, it’s a bit extreme – almost paranoid. Sounds like the author has been burned by credit card companies. I admit I got myself into quite a bit of debt with them in the past… Read more »

MsTek
MsTek
11 years ago

This is one time that I think an article on here has been bunk. It came off as very angry and spiteful and really doesn’t seem to address the issue of personal responsibility at all.

Get a grip- Credit Cards are not EVIL-OMG-SATAN. Not knowing how they work and abusing them is. Comes back to personal responsibility- not the man is out to getchya.

PDXgirl
PDXgirl
11 years ago

April, I used to think that personal finance education in high schools could be a big part of a real solution. Now I’m not so sure. I went to my little borthers high school graduation. He’s six years younger than me and developmentally disabled so he graduated 8 years after me from a different high school. They have a “scholars” program that about 10% of the kids acheived and this is what it entailed: 3.5 GPA 8 advanced credits (IB or AP) 3 years of a foreign language 1 credit of fine arts 2 co-curriculars (we used to call those… Read more »

April
April
11 years ago

@PDXGirl–I guess it’s about priorities. Is “career development” more important than learning how to manage your money? I took every advanced course offered, and I didn’t graduate that long ago, but there were some classes from which I gained nothing. The career development course in my high school was taught by a coach, and we were required to take it to graduate. I got ZILCH out of it. I remember one day he let us make paper airplanes and see whose flew farthest. It has to start somewhere, and we can’t expect parents who aren’t financially responsible to teach their… Read more »

See My Money
See My Money
11 years ago

Following tip #6 should keep you from having to use tip #3, and it is a much more effective and polite way of handling the situation.

mythago
mythago
11 years ago

I understand that China has had a few little consumer issues lately due to lax or non-existent regulation.

“Read the fine print” is important. It should not excuse dishonest business practices. Anyone who really “reads the fine print” would never have a credit card at all. Are the folks sticking up for credit-card issuers REALLY saying that they’re perfectly fine with a company tripling the interest on a past-due balance for no reason at all?

RenaissanceTrophyWife
RenaissanceTrophyWife
11 years ago

It seems that the author may have misjudged her audience slightly. I’ve seen similar articles on msn and the like, and for the non-personal-finance-oriented reader who is deep in debt and needs an eye-opener, this might do the trick. However, for this blog’s readership, the points are sophomoric. I think we all realize that if you can’t manage cash well, then you can’t graduate to managing credit in a disciplined fashion. Colleges don’t admit students without high school degrees or equivalent credentials, but in this situation the credit companies profit off those who have not yet mastered the basics. If… Read more »

Cathy
Cathy
11 years ago

Yes, personal responsibility. We all get that. However, there is also social responsibility. Too much consumer debt drives up inflation, which hurts all of us. Prices go up because people are using credit without there being a real dollar behind it. Which is why we have the mortgage mess we have today – home values kept going up and up and up because people were getting more and more credit without a real dollar value to back it up. Maybe we don’t need more regulatory laws, but we do need some sort of oversight. It hurts all of us when… Read more »

Adam
Adam
11 years ago

I saw that the total national credit card debt was $800 billion, which was close to what is being proposed to bail out failing banks. I said that instead of bailing out greedy banks we could use that money to erase every single American’s credit card debt. This lead to a conversation with some coworkers and the realization that even knowing what people know now (learned it the hard way), the overwhelming majority of people with credit card debt would just go right back into the debt cycle. This is not an education problem in the slightest. This is a… Read more »

Rhonda Porter
Rhonda Porter
11 years ago

Credit cards are just as evil (or not) as mortgages. I’ve been pondering on which is causing more havoc with our economy, easy credit with credit cards or easy credit with mortgages…either way banks have been pushing debt onto consumers who have no self control and who need to be more responsible. I thought this article was excellent…probably because this issue has been weighing on my mind.

Liz
Liz
11 years ago

Somebody earlier in the comments said that if their debit card had been used fraudently like their credit card was, they would have been out over $1000. That is not true. Debit cards by law carry the identical fraud protection that credit cards carry. I see both sides of this issue. Anything that promotes the “Gosh, I was taken for granted by the big bad institution” is a victim mindset in disguise. Our culture has lost sight of delayed gratification and personal accountability. We want it now and we don’t care if it costs us a lot more to get… Read more »

April
April
11 years ago

@Liz–From the Federal Reserve site: It’s important to be aware of the potential risk in using an EFT card, which differs from the risk on a credit card. On lost or stolen credit cards, your loss is limited to $50 per card. On an EFT card, your liability for an unauthorized withdrawal can vary: Your loss is limited to $50 if you notify the financial institution within two business days after learning of loss or theft of your card or code. But you could lose as much as $500 if you do not tell the card issuer within two business… Read more »

Spoonman
Spoonman
11 years ago

J.D.: agree completely. If regulation weren’t necessary and it was as simple a matter of everyone doing the right thing: then why are Americans in this mess in the first place? I’m not a victim, but a lot of people are. The people who trot out the old “responsibility” hat fail to realize that the bulk of the population aren’t as well educated or “tuned in” as they are. I’ve met plenty of folks who think they grew up “poor” and have a clue as to what those who actually did go through, but their observations are about as close… Read more »

Dave
Dave
11 years ago

Honestly, who gives a crap about credit card companies, or even credit (FICO) score.

From here into the indefinite future, cash talks, everything else walks.

Like a bank is going to turn down a mortgage application on dings for unused credit cards when I show up with 15% DTI and 50% down.

Here’s how to really stick it to the credit card companies: Don’t use credit cards.

mwarden
mwarden
11 years ago

I really don’t get the anti-credit-card mentality here. People get burned by debt because they can’t be responsible with credit; those people should ditch their credit cards. I, however, make significant money off of credit cards, because I put all my purchases on plastic and pay the balance off full each month. That money — which would have been paid in cash immediately — sits in high interest savings for up to 60 extra days (depending on timing). What do I pay for this service? I pay with having to deal with a much more simplified single-bill style monthly budgeting… Read more »

Bob
Bob
11 years ago

JD wrote: “I continue to believe that credit cards do structure their business in such a way as to “hook” consumers”. Yes they do. And I want ALL companies to do exactly that! Hook me with innovative products! Hook me with lower prices or better service! Hook me with better credit terms, cash back, organization of my spending into categories, integration with Quicken! That’s the free market in action, and it leads to incredible innovation and value. Too much regulation – or the wrong regulation – strangles innovation and keeps costs higher than they otherwise would be. There are already… Read more »

downwithdebt
downwithdebt
11 years ago

Credit card companies are in business to make money. The problem that gets me is that they like to sneak along some of there tactics. And there is ALOT of small print. Why can’t they just make the print read this, (we have a right to raise your rates at any time for any reason so if you keep a balance please be aware that we could jack your rates up so much it will make your head swim!) I would have to say that if my husband and I ran our business (an auto repair shop) that way, we… Read more »

Ryan K from Going Carless
Ryan K from Going Carless
11 years ago

Isn’t the idea just insidious? Why can’t people step back and look objectively at the big picture?

These companies make exorbitant amounts of money just because other people want stuff they can’t even afford.

What a sick business to be in. Hurting the people that don’t lack the judgment to even know they’ve been hurt.

http://www.goingCarless.com

Tim
Tim
11 years ago

point 1 should have been: take control of your financial life. it takes two to tango. i’m offended by the post, because i have a ton of visa stock and everyone needs to use their visa more so i can get rich. which goes to my second point, instead of whining about the credit industry, buy stock in it. just like instead of whining about the oil industry, buy stock in it. yeah, personal responsibility and social responsibility are one in the same. chicken before the egg scenario. our social contract shouldn’t be save us from ourselves, but that is… Read more »

mythago
mythago
11 years ago

Anything that promotes the “Gosh, I was taken for granted by the big bad institution” is a victim mindset in disguise.

And if the institution is indeed big and bad, why is it a “victim mindset” to point that out? Do you really believe the people who run corporations are exempt from all this “personal responsibility” talk?

Tyler Karaszewski
Tyler Karaszewski
11 years ago

This post really doesn’t say anything at all. The entire point it makes is “stop using credit cards!” That’s a perfectly reasonable point, but anyone who reads your site or any similar site has heard it a million times. I know you’re capable of better posts than this.

RJ
RJ
11 years ago

I agree with those who say that individual responsibility is key when it comes to success and failure with credit cards. However, I don’t think individual responsibility is the only key. Ethical business practices are also important. It’s true that, from a dichotomous consumer-business point-of-view, credit card companies are merely trying to meet consumer demand. However, life is more complicated than that. Credit card companies, in conjunction with the ad industry and all sorts of other businesses, have worked hard to create consumer demand. Even some of the most intelligent people in this society have seen their ability to take… Read more »

Tim
Tim
11 years ago

so if you are confused by it, then don’t sign up for it. This is what gets me the most. We have all the control in the world when it comes to signing for credit. mythago: no, sometimes bad people do bad things regardless of where they sit. but in terms of arguing the service provider versus the consumer, the consumer has as much control or as little control over the service. Ok, there is an argument that once you make the decision to go into credit, then you are trapped. again, there you have control, too. there are exit… Read more »

Harold
Harold
11 years ago

You know, it’s funny how quickly these discussions turn into an issue of personal responsibility and choice. It’s just like the credit card debt post a while back.

Bubblebrain
Bubblebrain
11 years ago

When I was in college, I received a check in the mail for several thousand dollars. The letter that came with it went on and on about what I could do with the money, opportunity knocks! It was worded to imply that the money was mine, free and clear. Being a skeptical New Yawker (ain’t nobody gonna give me money for no reason!) I read and reread the letter trying to find the catch. After a half hour, I found, in magnifying glass size font, hidden in a decorative border, the fact that it was a credit card company promotion… Read more »

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