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If you're
looking for credit, be wary of some 'gold' or 'platinum' credit card
offers promising to get you credit cards or improve your credit rating.
While sounding
like general-purpose credit cards, some 'gold' or 'platinum' credit
cards permit you to buy merchandise only from specialized catalogues.
Marketers
of these credit cards often promise that by participating in their
credit programs, you will be able to get major credit cards (such
as an unsecured Visa or MasterCard), lines of credit from national
specialty and department stores, better credit reports, and other financial
benefits. Rarely, however, can you improve your credit rating or get major credit
cards by buying 'gold' or 'platinum' credit cards. Often the only major
credit card you might get is a secured credit card that requires a substantial
security deposit with a bank.
In addition,
many of these credit-card offerors do not report to credit bureaus
as they promise, and their cards
seldom help secure lines of credit with other creditors.
Such
'gold' and 'platinum' credit card offers usually are promoted through
television or newspaper advertisements, direct mail, or telephone solicitations
using automatic dialing machines and recorded messages. People who live
in lower-income areas often are the target of these sales pitches.
Watch Out
For...
Be wary
of 'gold' and 'platinum' credit card promotions that:
Charge upfront fees, without saying there may be additional costs.
Some 'gold'
or 'platinum' credit card promoters charge $50 or more for their
cards. Only after you agree to pay this fee are you told there's
an additional
fee, sometimes $30 or more, to get the merchandise catalogues. Yet,
these catalogues are the only places you can use the cards.
Use '900' or '976' telephone exchanges.
Ads for
' gold' and 'platinum' credit cards may urge you to call numbers
with '900' or '976' exchanges for more information. You pay for phone
calls
with these prefixes -- even if you never get the 'gold' or 'platinum'
credit card. The cost for these calls can be high.
Misrepresent prices and payments for merchandise.
You're
not allowed to charge the total amount when you buy merchandise from
'gold' or 'platinum' credit card catalogues. Instead, you often must
pay
a cash deposit on each item you charge -- an amount usually equal
to what the company paid for the product. Only after you pay your
deposit
can you charge the balance. Also, catalogue prices can be much higher
than discount store prices.
Promise
to easily get you "better credit."
Marketers
of 'gold' and 'platinum' credit cards often claim its easy to get
major credit cards after using their credit cards for a few months.
In fact, the only major credit cards you usually can get through
these marketers are secured. A secured credit card requires you to
open and maintain a savings
account
as security for your line of credit. The required deposit
may range from a few hundred to several thousand dollars. Your credit
line
is a percentage
of the deposit, typically 50 to 100 percent.
How To Protect
Yourself
Follow
these precautions to avoid becoming a victim of 'gold' and 'platinum'
credit card scams:
Think
twice about any offer to get "easy credit."
Be skeptical of promises
to erase bad credit or to secure major credit cards regardless of your
past credit problems. There are no "easy" solutions
to a poor credit rating that's based on accurate information. Only time
and good credit habits will restore your credit worthiness.
Investigate an offer before enrolling.
Contact
your local Better Business Bureau, consumer protection agency, or
state Attorney General's office to see if any complaints have been
filed against a particular promoter of 'gold' or 'platinum' credit
cards.
If
a marketer promises that a credit card is accepted at certain retail
chains, verify it with the stores.
If a marketer
assures you that reliable information about you will be reported
to credit bureaus, call the bureaus to confirm that the merchant
is a member. Unless 'gold' or 'platinum' credit card merchants are
subscribers to credit bureaus, they won't be able to report information
about your
credit experience.
Be cautious about calling '900' or '976' telephone numbers.
Calls to numbers with '900' or '976' prefixes cost money. Don't confuse
these exchanges with toll-free '800' numbers. If you dial a pay-per-call
number mistakenly, contact your local phone company immediately. They
may be able to remove the charge from your bill.
Courtesy:
www.ftc.gov |
