Credit Card Marketing Scams
CAN QUALIFY FOR A MAJOR CREDIT CARD!
Separated?Divorced? Bankrupt? Widowed?
BAD CREDIT? NO CREDIT? NO PROBLEM!
* Make the call NOW and get the credit you deserve!
* Even if you've been turned down before,
you owe it to yourself and your family.
* Your major credit card is waiting.
this may appeal to you if you have a poor credit history or no credit
at all. Beware: while secured credit cards can be an effective way
to build or re-establish your credit history, some marketers of
secured cards make deceptive advertising claims to entice you to
respond to their ads.
vs. Unsecured Cards
Secured and unsecured cards can be used to pay for goods and services.
However, a secured card requires you to open and maintain a savings
account as security for your line of credit; an unsecured card does
savings deposit for a secured card may range from a few hundred
to several thousand dollars. Your credit line is a percentage of
your deposit, typically 50 to 100 percent. Usually, a bank will
pay interest on your deposit. In addition,you also may have to pay
application and processing fees -- sometimes totaling hundreds of
dollars. Before you apply, be sure to ask what the total fees are
and whether they will be refunded if you're denied a card. Typically,
a secured card requires an annual fee and has a higher interest
rate than an unsecured card.
Ads and Scams
The goverment has taken action against companies that deceptively
advertise major credit cards through television, newspapers, and
postcards. The ads may offer unsecured credit cards, secured credit
cards, or not specify a card type. The ads usually lead you to believe
you can get a card simply by calling the number listed. Sometimes
the number is not toll-free. A '900' number service, for which you
are billed just for making the call, may instruct you to give your
name and address to receive a credit application, or give you a
list of banks offering secured cards. It also may tell you to call
another '900' number -- at an additional charge -- for more information.
ads often leave out important information.
of the '900' call -- which can range from $2 to $50 or more;
The required security deposit, application, and processing fees;
Eligibility requirements like income or age;
An annual fee or the fact that the secured card has a higher than
average interest rate on any balance.
Avoid the Scam
To avoid being victimized, look for the following signs:
of easy credit. No one can guarantee to get you credit. Before deciding
whether to give you a credit card, legitimate credit providers examine
your credit report.
A call to a '900' number for a credit card. You pay for calls with
a '900' prefix -- and you may never receive a credit card.
Credit cards offered by "credit repair" companies or "credit
clinics." These businesses also may offer to clean-up your
credit history for a fee. However, you can correct genuine mistakes
or outdated information yourself by contacting credit bureaus directly.
Remember that only time and good credit habits will restore your
If you're considering a secured card as a way to build or re-establish
a credit record, make sure the issuer reports to a credit bureau.
Your credit history is maintained by companies called credit bureaus;
they collect information reported to them by banks, mortgage companies,
department stores, and other creditors. If your card issuer doesn't
report to a bureau, the card won't help you build a credit history.
a credit record, you may want to apply for a charge card or a small
loan at a local store or lending institution. Ask if the creditor
reports transactions to a credit bureau. If they do -- and if you
pay back your debts regularly -- you will build a good credit history.
If you cannot get credit on your own, you can ask a relative or
friend with a good credit history to act as your cosigner. The cosigner
promises to repay the debt if you don't.
interested in applying for a secured credit card, the BankCard Holders
of America (BHA) provides a list of institutions offering secured
cards. Send a check or money order for $4.00 to:
"Secured Credit Card List"
BHA Customer Service
524 Branch Drive
Salem, VA 24153
having problems paying bills, you may want to contact a credit counseling
service. Non-profit organizations in every state counsel consumers
who are in debt. Counselors try to arrange a repayment plan that
is acceptable to you and your creditors. They also can help you
set up a realistic budget. These counseling services are offered
at little or no cost to consumers. You can find the office nearest
you by checking the White Pages of your telephone directory.
Sometimes, non-profit counseling programs are operated by universities,
military bases, credit unions, and housing authorities. They are
likely to charge little or nothing for their services. Or you can
check with your local bank or consumer protection office to see
if it has a list of reputable low-cost financial counseling services.