Warning: Credit Card Rip Offs in the Mail

The U.S. Mail in being flooded with Credit Card Applications for Gold and Platinum Credit Cards. The deals and interest rates sound outstanding. But these applications are like a fancy fishing lour with lots of wiggly worms that hide the “rip-off” hooks inside.

These applications always promise an extremely low interest rate, like “2%” or “0%.” But you have to check the small print to find out how long this rate will last. Most are for six months or less then the rate goes up to 16 to 18 per cent interest, some even go as high as 22%.

What to Look For in the Application

There are normally many hidden costs or rules for these great sounding God or Platinum Credit Cards. These hidden fees or costs are normally in extremely small print on the back of the application written is gray ink that is almost the same color as the paper it is printed on. Bottom line they make it extremely hard to read.

Always look for annual membership fees that can run as high as $100. Some cards have cost fees if you do not charge a certain amount on the card in a one year period. Look for late payment times and fees that can increase your long-term interest rate on the card. Some cards have rules that if your payment is late by just one day then you have to pay a late fee, plus your interest rate increases to 24% for the rest of the year or in some cases for the life of the credit card.

The Federal Trade Commission has alleged that some credit card companies have purposely held payments and processed them late so that the interest rate could be increased. So even if you pay on time the credit card company would still increase your interest rate. Also look out for credit cards that inform you in the small print that the card is only good for purchases from their “Special Gold Card Catalog.”

What this really means is that you are paying a yearly fee to be able to buy from their catalog that has prices higher than you would find at most stores. It is a total rip-off. Why pay them a fee to buy their products at higher prices, and then pay them interest on top of that? Remember the Credit Card Industry is making about $7 to $20 Billion dollars per year.

How to Get the Best Deal on a Credit Card?

You are going to find the best deals on credit cards at banks or credit unions. They will always have the best interest rates and normally none of the hidden fees.

Remember always negotiate for the best rate. Even if you already have the bank’s card you can negotiate for a lower interest rate. The bank does not want to lose a cardholder for an interest point or two. Also if you are a good cardholder you can normally get the annual fee removed. You should not have more than two or three major credit cards. When you have too many credit cards it hurts your credit rating. The credit rating services calculate that if a person has too many credit cards then they are open to the possibility of getting into excessive debt.

Don’t Just Toss Out the Applications!

Make sure you shred all these credit card applications. There are people who make a living out of taking your credit card applications out of your trash and selling them for $35 each to an identity theft crook. This crook then fills out your application, and changes your return address to his address, and sends it in. In a few weeks he get a “real” Gold Credit Card in your name. Now he starts buying and buying at shopping centers on your credit card. Always destroy the applications.

Report filed 5/3/02