A Plethora of Credit Card Offers
Mar 14th, 2007 by Jennifer Lynn
Why it pays to read the fine print on credit card offers
Until successfully regaining control of my financial situation, I discontinued using credit cards for the past few years and relied exclusively on debit. However, one of my goals this year is to apply for a credit card and responsibly build my FICO score to an admirable level.
My strategy is simple; to only make purchases on my credit card with cash I all ready have in the bank, and to pay my balance off in full each month.
Here are some of the credit card offers I’ve received this past week in the mail:
- You’ve been pre-selected for a VISA with a $750 credit limit! Convenient 60-second online processing!
Let’s examine the fine print on this one.
- 23.99% APY (ouch!) If any payment is late, the APY jumps to 29.99% (are you kidding me??)
- Grace Period for Repayment of Purchases: None (!!!) Uhh …
- Account Origination One-Time Fee: $50
- Monthly Maintenance Free: $10.95 ($131.40 annually)
The thought that anyone would be suckered into this zero grace period, high annual fee, rip-off piece of crap card makes me want to weep. Seriously. This is the epitome of the sneaky ways a credit card company will profit and become billions richer while simultaneously making the consumer piss-poorer.
The only appropriate place for this pre-approved ‘exclusive offer’ is the trash. I just feel for the poor tree forced to suffer over this ostentatious crap. Or the ignorant sucker of a consumer who neglected to read the fine print before applying.
Shall we continue on to the next offer?
- You’ve been pre-approved for a Platinum VISA! Act now to get your credit line up to $2,000, with 0% Introductory APR on purchases!
Hmm … enticing. Let’s flip through the fine print to see how long this 0% APR lasts, shall we?
- 0% for first three monthly billing periods; after that, 18.9% APR
- Annual Membership Fee: $69
- One-time Enrollment Fee: $39
- Grace Period for Repayment of Purchases: 25 days
This offer is loads better than the first, at least it offers a grace period. But I could do without all the unnecessary fees. Tossed. Next!
- Dear Miss Jennifer Lynn, apply for the DISCOVER card which offers you 5% cashback bonus and more!
Hmm, interesting. Let’s see what this one offers.
- 0% APR on purchases until November 2007, then 12.99% APR
- Grace Period for Repayment of Purchases: at least 25 days when balance paid in full each month
- Set-Up Fee: None
- Annual Fee: None
Definitely the most attractive of the three offers. No hidden annual or setup fees. A reasonable grace period to avoid finance charges. The APR is still ridiculous in my opinion, but easily avoidable by paying off the balance in full each month. The cashback is an attractive incentive as well.
What to Look For in a Credit Card
The moral of this story; if you’re thinking of applying for a new credit card, please shop around. Don’t get suckered into a card with a high annual fee. And, for god’s sake, please make sure you’re being offered a reasonable grace period to avoid these nasty finance charges.
* Comparison shop for the best credit card deals before settling. Credit card companies are in aggressive competition with each other, so take full advantage of this. Look for credit cards with no hidden fees, low APY, and longer grace periods. *
And if you’re in the bad habit of carrying balances over from one month to the next, you’re going to get slammed. (Your credit card company will adore you, though.) Only make purchases you can easily afford to pay off in full each month.
If you’re deluding yourself into thinking you’ll be fine because you can afford paying the minimum balance amount each month, think again. You, my friend, don’t own your life. You’re renting it.
Don’t buy into the consumerist mentality. Stop renting your life away by paying for items with future earnings. Unless, of course, you enjoy being a perpetual slave.
I know what type of lifestyle I’ll choose.
~†~ Baby Steps are Key ~†~
Stop credit card companies from getting richer as you get poorer. Learn how to master your money instead of allowing your money to master you.
=^..^=
Let’s not forget about the universal default clause. It basically says that credit card companies reserve the right to change the APR if you default on any payment with any other lender or based on your credit report, which they will regularly monitor. I wrote more about it on my blog, but it is something that many credit card companies are doing without really informing their customers upfront. I guess that’s the price you pay for not really reading the fine print, however.
I don’t know if you’re interested in any other offers, but Chase is offering a pretty good deal on their “Freedom” card right now. After your first purchase you get a $250 rebate! The card has no annual fee, but the interest rate is a variable 18.24% (of course, if you’re not carrying a balance, interest rate doesn’t actually matter, does it?), and the grace period is at least 20 days. The rewards program it has is one of the better ones I’ve seen - 3% on grocery, gas, and “quick service restaurants,” and 1% everywhere else. Also, if you don’t cash out until you’ve got $200 in rewards, they’ll give you $250!
You can find it at www.chase.com, just look for the blue box that says “Receive $250 after your first purchase.” If you don’t see it at first, refresh - they have a few different offers cycling on the front page right now.
Rock On!!
;))
This is just another reason why your website kicks ass….there’s not a subset of our society who needs enlightenment on credit cards more than college students and young adults. As a Libertarian, I basically support free market economics but I have a real issue with the way that credit card companies are allowed–in some cases *encouraged*–to inundate college students with credit card offers. Here at the University of South Carolina I know at the beginning of every semester there’s dozens of credit card solicitors on campus offering free stuff in exchange for filling out an application. At the very least, college students should learn to get more for filling out a credit card application than a free sandwich from Quiznos….
The credit card companies are absolutely trying to exploit people who are just starting to establish a credit history.
I have to admit that I got lucky with my first credit card. I didn’t read the fine print or anything…I just filled out the application. It turned out to be for a citibank visa with a $250 limit and a 18% APR. Luckily there was no annual fee or initial fee. They increased my limit by $100 each year until I graduated. The month I graduated they increased my limit to $5000 and I said to myself “ahhhh so THAT’S how they get you.”
[…] Jennifer goes through some Credit Card Offers to see the good and bad of each. This was listed in the most recent Carnival of Personal Finance, […]
Damn, that’s crazy! I’ve gotten a bunch of offers in the mail and everything for new credit cards. I’m just sticking to the one I got when I received my student loan :D.
Jack…
Great article, thanks for the info….