Learn to Identify The Most Common Credit Card Scams

It doesn't matter whether you're a first time or long term credit card user; it is paramount that you know about the most common scams that you can fall victim to. Although many reputable card companies abound, there are just as many crooked ones as well.

If you don't have the slightest idea of how easily you can be duped by these con artists, you could lose several hundred dollars or more. Read about these vicious credit card scams and learn how to spot - and prevent - a potential rip-off.

Debt suspension offers

Banks sometimes provide debt suspension offers as a service to "assist" you to be up-to-date with your card payments. In this scheme, you need to pay a fixed monthly amount so in the event you fail to pay your bills, interest will not accrue throughout this period.

Initially, this may sound like a great offer but the benefits are almost non-existent. You're not allowed to use your card while unemployed, and while interest is not being accrued, your payments remain unpaid so the moment you find work, you still have to settle the balance. In principle, you've just wasted good money for a service that can't be of real help to you.

If you're offered a credit card, first verify that a debt suspension offer of this kind is not inserted in the agreement as this will cost you later. If it is included, then have it taken out and get a standalone insurance policy to assist in your bill payments in the event you are unemployed.

Advance approval fees

This scam is one of the worst there is and the victims are people who are in dire need of a card that has great rates. The "operator" will provide you with such a card but you need to pay an approval or administration fee in advance for your application to be processed.

Once you've made the payment, the company will vanish and move on to their next victim. If a card is offered that requires a payment upfront, simply decline. Even with a poor credit you are not required to pay advanced fees for cards. The lender can only either approve or disapprove your application; no fees are needed.

Credit protection

Another prevalent credit card scam is one that offers high-priced credit safeguards to your card if ever it gets stolen or lost. The extra fee for your card's "protection" is ridiculously high compared to the coverage which is almost none.

You're not likely to lose much if you immediately report your lost or stolen credit card, and you're already covered by insurance or consumer protection. If protection is really necessary, then contact an independent company for a standalone policy which will be cheaper yet will cover all your cards at one go.

If you're applying for a credit card, be sure to read and check out all the angles of the contract before signing. If anything is not above board, then back out and look for another card company. As long as you are not ignorant of the different credit card scams, you will be able to come upon a reliable card company that can offer you the best deals.

By Benedict Hunter