Credit card tricks to avoid

While the recently enacted credit card rules provided some positive changes to the credit card landscape, there are still plenty of ways credit card companies can make a fool out of you, all while making a profit. To kick off Financial Literacy Month the team at FoolProof has decided to highlight some of the worst credit card tricks that affect young people today -- and to help you figure out how to not look like a fool.

FoolProof looked at the findings of the Pew Charitable Trust's November 2009 report on credit cards(pdf) and determined that even with the new regulations in place, 100% of the credit cards offered to young people by the 12 biggest banks still use practices deemed "Unfair and Deceptive" under Federal Reserve guidelines.

Examples of these Unfair or deceptive practices include the following practices of big bank credit cards.
  • 90% of these credit cards still continue to charge their penalty interest rate even if you resume making on-time payments.
  • 100% of these credit cards encourage young people to use cash advances – the highest interest rate uses for a credit card.
  • 100% of these credit card companies constantly push young people to charge more than they can pay off each month.
Will deHoo, CEO of FoolProof, provides several tips to help you stay smart about credit:


These practices all combine with the inexperience that many young people have in the area of credit cards and personal finance to create a dangerous situation where looking like a fool isn't the worst thing that can happen. While the new rules have brought some eye opening changes to statements, the "Unfair and Deceptive" practices including charging a late fee based on the entire balance rather than on the amount that is late are still alive and kicking.

If you don't want to be the butt of a big bank's April Fools joke then why not educate yourself with the free FoolProof program? The FoolProof format is great for students to use on their own or for parents to use to help their young adults and kids learn more about money. You can also join a consumer advocacy group and make a difference by adding your voice to others to enable positive changes in the credit card and banking industries. There are many groups and FoolProof can help you find one that fits you.

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