Have you ever had a credit card company just raise a rate on you and never tell you why? Do you feel that credit card companies are trying to scam you? Credit cards are a necessary evil in todays world because of the added convenience they provide. There is a reason that credit card companies send you paper on top of paper with fine print even those with perfect vision can not read. Even if you feel they are not trying to scam you, you must at least admit they follow practices that are unethical at best. This article will delve into the credit card industry and some things you may have too watch out for.

According to many experts on the card industry, the credit card issuers are misleading consumers and making up their own rules as they go. They advertise with cute commercials, offer a very low introductory rate, and hire the finest minds to figure out a way to trap you in the fine print. The real problem lies in the fact that the industry is basically unregulated with no over site committees around. Lets go a little deeper and expose some things.

The industry basically has a couple kind of customers. The first is the customer who pays off all of the balances before they are due. There is no profit to the credit card issuers so these people are called deadbeats. These people are using cards the way they should, don't buy with money you don't have and pay before you have any finance charges. Approximately 33% of all credit card users fall into this category.

A majority of users carry a balance and are the "profit-makers" for the banks. The average user runs a balance of just over 8,000 in credit card debt. These users pay interest and fees for the privilege of carrying that balance. Over the last ten years this balance has doubled and credit card companies are generating record profits. Last year alone the credit card industry earned an estimated 30 billion dollars.

The name of the game today is the 0% interest offer for the first six months. This can be legitimate if you know how to use it and of course pay your debts off. The trouble comes in when you carry over a balance because many times this will cost you more in the long run. The rate after six months will jump higher than a normal rate and you will end up paying more for carrying the charges.

The second way the companies gain massive profit is with rate hike triggers. The industry provides many reasons to justify a rate hike and some are legitimate ones. The ones I am worried about are the deceptive reasons. One of these ways is how the "default" terms are spelled out in the fine print. The terms and conditions of this credit card can be changed at any time, for any reason with a 15 day notice.

The following are ways that can trigger late fees, penalties, or rate hikes.

Late payments If you don't pay your bills on time, the company is justified in taking away your rate. You broke the rules. The problem is the card issuers are becoming very anti-consumer to help you trip up. One single late pay or lapse, a payment lost, or a charge on another card can trigger the rate increase and excessive late fees. I have even seen card issuers lower the available balance of the card holder to the exact amount of debt owed and then charging them an over the limit fee.

Spending on other cards If you don't think the credit card companies don't know what you are doing with the other cards think again. As a result if you go over your credit limit or a late payment on another card it triggers a "universal default clause". It gives the card issuer the right to raise your interest rate on a card that you have never made a late payment too.

Defaulting on non credit card bills Everything is tracked by the big three credit bureaus and a late pay on a mortgage, cellular bill, utility, or car payment is readily available for the credit card issuer. If you default on anything they will spot and then increase your rate.

When I look back it seems that credit card issuers started to profit massively when the banking industry successfully eliminated the limit on interest rate a lender can charge a borrower. This deregulation and the technology upgrades that allow for real time tracking of finances, lead to record profit year after year. Now with nationwide banking the industry keeps growing and makes even more credit cards available. The real cost of this credit is actually a lot more than most people would realize but that is for another day. If yo get your rate increased I would close out that card and try to find one with a lower rate. If thats not possible your only other recourse is to overpay and get rid of those excess charges. Good Luck