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U of L expert says credit card companies are playing hardball

The holidays are long gone, but many Americans will be reminded of them every month when the credit card bills arrive in the mail. Credit card debt is an estimated $800 billion dollars in the U.S.

Russ Ray

"The old saying—the worst debt is credit card debt—is true. It works against you, it's like being hit by a truck and it hurts your financial situation."

Russ Ray is a finance professor at the University of Louisville. He says the credit card companies will try to sock it to you if they can. One way the banks try to squeeze your wallet is by offering credit protection for a monthly fee. Ray says it's not a scheme—just an unnecessary service.

Ray continues

"People are already protected. Under federal law the maximum liability is $50 and that's if you don't tell the company it's lost. If you do tell, your liability is zero."

Late fees can hit you hard too. Credit card companies share information. So, if you're late on a Mastercard payment they'll tell Visa. Then both could double or triple your interest rate.

Ray adds

"Credit card companies are really playing hardball these days and they will look for the tiniest, flimsiest excuses to double or triple your interest rates."

Ray says signs of abuse include depending on credit cards to get through the month, paying only the minimum payment, and reaching the maximum credit limit. He says non profit credit counseling agencies are the best organizations to call to get help.

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