Free tips on how to get a secured or unsecured credit card without being ripped off by credit card sharks

SECURED AND UNSECURED CREDIT CARD SCAMS

The following has been taken from information based on that found in H L Saffell's book: "REPAIR YOUR CREDIT WITH LITTLE KNOWN SECRETS the scam artists hope you don't find out about". If you would like a copy for your own, CLICK HERE.

SECURED CREDIT CARD MARKETING SCAMS

This is a real goody - and you should see all the sharks who advertise it. You see their ads everywhere, on television, in newspapers, in magazines, even on the internet. And don't they sound convincing? Again, don't you believe it!

You see ads like these:

  • Bad credit? No matter. We guarantee you both Visa and Mastercard!
  • BAD CREDIT? NO CREDIT? NO PROBLEM!
  • ANYONE CAN QUALIFY FOR A MAJOR CREDIT CARD!

    Sound good? Too good to be true? If you were a banker would you give a credit card to someone with your credit history? Come on, let's get real!

    Lets see what the FTC says about Credit Card Scams:

    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.

    Secured 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 not.

    The required 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.

    Deceptive Ads and Scams

    The Federal Trade Commission (FTC) 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.

    Deceptive ads often leave out important information.

  • The cost 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.

    How to Avoid the Scam

    To avoid being victimized, look for the following signs:

  • Offers 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 credit worthiness.

    Credit Reporting

    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.

    Actually what the FTC says about credit cards above is pretty tame compared to what goes on. The so-called "non-secured" card is actually an in-house card. It cannot be used anywhere else outside the issuing company and its catalog subsidiary. Seldom are your payments reported to a credit bureau - and if they are, the credit bureau places little value in such reports.

    Close all credit card accounts which you are not using or don't intend to use. (Actually, two credit cards at the most are all you'll ever need.) Why close them? Because they show up on your credit record and would be creditors will include the limit totals on all cards, including the ones you don't use, when determining if they want to extend you credit. These cards are marked "current" on your credit record. You need to WRITE the credit card company and tell them to cancel the cards and also ask the company to tell the credit bureaus that these items were "closed by the consumer".

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    bsaffell@usit.net... Last Update: 52008...Copyright 2008 by Hilmur Saffell

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