Credit Card Over Limit Fees Up

When your card is maxed out, you must add extra to your minimum payment, to make sure that your balance stays below your credit limit.

Otherwise you will get dinged for an over limit fee at the end of the month, when the interest that has been accruing all month gets added to your balance and takes you over your credit limit.

So many still do not understand this.

And that’s why the amount of money generated by penalty fees like late charges and over limit charges have increased by about $1 billion annually in recent years, and should top $20 billion this year.

Entrapping low-income people in a cyle of credit card debt and penalties when they have difficulties paying their minimum payments has been a goldmine for credit card companies.

The recently passed CARD act of 2009 is supposed to change that next year.

Frankly, I’ll believe it when I see it, for reasons explained in Money-Saving Credit Card Secrets.

However, regardless of how effective or ineffective the new law is going to be in regard to helping low income Americans dig out of debt, credit card companies are now gearing up to make the bulk of their profits off the more affluent by eliminating perks and adding charges.

The problem is that credit card companies and their stock holders are used to billions in profits.

So they are looking to roll out more advanced strategies in order to make those billions off people who do not enhance their financial literacy in the coming months and years.

Don’t one of those people be you.