4 Credit Card Rip Offs to Avoid

“I have to pay you cash because I don’t have a credit card at the moment.”

I was surprised when my buddy told me this before a trip. We were going away and the time came to pay for the trip. He couldn’t put his credit card down because he didn’t have one. This guy was always good with money, but something went wrong.

He got carried away with his credit card, couldn’t pay off his balance for years, and then finally snapped. When he snapped he cut up his credit cards and tossed them out.

Nobody is immune to a credit card mishap. This is why I need to go over four credit card rip offs that could be costing you right now.

1. Signing up for benefits/perks

I’m all for the travel rewards, but most people will never take advantage of the points. It’s not worth paying an annual fee if you’re not getting your money’s worth out of it.

You have to ask yourself the following questions:

• Do you travel enough to pay for the travel card?
• Do you really plan on accumulating a decent amount of points?
• What are you going to use your credit card for? The perks are worth it only if you know what you’re doing. Most of us don't know what we’re doing.

2. Signing up for the free gift

This is the oldest trick in the book. You sign up for the credit card because it comes with a free Frisbee or hand bag. The gift gets old after ten minutes. You get the credit card in the mail and end up using it because you don’t really know what this piece of plastic means.

Next thing you know, you owe money on this card and you can’t pay it back because your income drops. Then all of a sudden you’re now in credit card debt.

The free gift is a huge con. Go out and buy yourself that gift with cash. You don’t need to get it for free.

3. Being tempted to buy more

The problem with a credit card is that you’re always tempted to spend more money.

Most websites will save your credit card data. This means that you don’t even have to type anything in. You can log on to your Amazon account and a buy a book with just one click.

4. The quick pay option

I’m a sucker for this. My friend Mike had this canceled because he found himself getting tempted far too often. I on the other hand enjoy this option because I’m always going through the drive-thru at Tim Horton’s. I do realize that I’ve made far too many impulse purchases over the years.

My favorite quote from a book on credit cards and debt is attributed to MJ DeMarco:

“The key to controlling parasitic debt is to control instant gratification. It’s much easier not to each chocolate cookies if you don’t bring them home from the grocery store, and it’s easier to avoid debt if you don’t buy useless things. When you’re thinking about buying something, think about whether you really need it, whether you’ll still be using it 6 months from now, and so on.”

We’re all guilty of instant gratification. I used to be horrible with this. In 2005 I purchase the video iPod because I thought that I really needed this for my commute. It took me six hours to add a video clip and I usually just crammed for exams on my commute to school.

Nobody will ever be perfect. I want you to look out for these four credit card rip offs.

Have you ever applied for a credit card just for the perks? Tell the truth.