“Shopping for a loan can be intimidating and confusing,” says Detweiler, “but the more consumers know about the tricks out there, the better they’ll be able to get the best deal.” The complete Credit Traps report is available at www.CreditTraps.com.
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Founded by Detweiler and William Hillestad -- a former marketing consultant for the lending industry -- the goal of CreditTraps.com is to make consumers aware of potentially costly marketing gimmicks and, by doing so, help to put a stop to more egregious practices. Here are a few examples from a free report available at CreditTraps.com:

Universal Default Clause (credit cards): If you are late with a payment to any creditor, the card issuer may raise the rate on your card to an extraordinarily high rate. In one example given on the site, the rate goes from 0% for the first year to a default rate of 24.99% if the consumer is late once with a payment to any creditor.

The Guaranteed Approval Trap (credit cards): Millions of consumers with damaged credit are signing up for “guaranteed” approval Visa and MasterCards. These programs tout the fact that unlike a secured credit card, there is no upfront deposit required. However, there are so
many fees associated with the card that a consumer who gets approved can get a credit card with a $300 limit  and $278 in fees already charged. Consumers who can’t get a regular credit card are much better with a secured card, where at least they will get their deposit back eventually.

Debt Consolidation Trap (mortgages and credit cards): Many people are consolidating unsecured debts with mortgages or home equity loans. Often they focus just on the monthly payment savings, and don’t even realize that the new lower-payment, lower-rate loan  will actually cost more over time. One of the best ways to consolidate is to keep paying the higher monthly payment you were making before consolidating. With a lower interest rate, this can shave years off your debt and save thousands in interest.

The Signing Surprise (mortgages): While lenders are required to provide a Good Faith Estimate of closing costs within three days of taking a mortgage application, there’s no real penalties if the costs actually charged at closing are different. It’s not unusual for consumers to find themselves at the closing table faced with additional charges, sometimes totaling thousands of dollars more. The best defense? Tell the loan officer you’ll bring your copy of the Good Faith with you to closing and will challenge any new fees.

The Eleventh Hour Change-Up (mortgages and car loans): At the last minute a consumer trying to buy a car (or get a mortgage) will be told they didn’t qualify for the payment they were originally quoted, but that the program they qualify for is only a “few dollars more a month.” For example, on a car loan, the salesperson may say “it’s only $19 a month more.” On a four-year loan, $19 a month adds up to $912! Consumers should protect themselves by looking at the total cost of the loan, not the monthly payment.

“Shopping for a loan can be intimidating and confusing,” says Detweiler, “but the more consumers know about the tricks out there, the better they’ll be able to get the best deal.” The complete Credit Traps report is available at www.CreditTraps.com.
 

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