1 Way To Avoid Credit Scams
If you have bad credit or less that perfect credit there are many companies that are out to try and take advantage or you. If you have bad credit you probably receive very few legitimate offers and these companies are counting on that fact.
The unfortunate thing is the offers from these credit card companies seem like legitimate offers. Usually the credit company will give you offers that include astronomically high interest rates, steep fees and other crazy terms.
These companies are hoping that you are trying to repair your damaged credit and want the conveniences of carrying a credit card with you. So what they do is mail out offers that look like legitimate offers for either a MasterCard or Visa. They first let you know that you have been pre-approved. Then they really get your attention by offering you a pre-approved credit card with a $5000 line of credit that requires no security deposit. In actuality they are usually credit cards that can be used at only specific catalogue clubs or store clubs.
This may sound too good to be true. If you are desperate for a credit card of your own, you are ready to jump on any offer that arrives in the mail. Therefore, it is important that you read the fine print when such offers arrive in the mail. Look thoroughly over the offer before making a commitment to it.
Most credit card scams start with a great opening line like, "you have been pre approved for a MasterCard with up to a $5,000 credit limit". They try to make it sound very simple. They ask you to check the printed information on the application and make sure all the information is correct. Then just sign the application and mail it back to them. Then they will verify your personal information and promptly mail out your new credit card.
If you have carefully read over their documents you have realized that this is not a regular MasterCard. This card is limited to purchasing items that are from either their online store or at a special online catalogue. You will not be able to purchase anything else by using this card. Meaning you cannot go to a local restaurant and charge your meal. What the online stores generally sell is off brand products like electronics or household items.
If you continue to read further on into the letter, you will find out that you will need to mail the company a check or money order for $299, in order to activate the offer. The company reassures you that you will get a discount when you make your first credit card purchase. Some of the companies out there will charge you an additional couple hundred dollars, in annual fees. This is on top of the already high activation fee. Suddenly, this offer sounds less and less appealing.
Chances are, these types of offers come with extremely high interest rates. The rates can run upwards of 45% in some instances. Therefore, it is vital that you read the fine print on all credit card offers.
The best advice you can get with offers such as these is to throw them away. If you really want to improve you credit take the money you would use on activating this account and apply for a legitimate secured credit card. These companies actually report to the credit bureaus so you can begin to repair your damaged credit. Keep this in mind the next time you get an offer that sounds to good to be true in your mail box.
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