Like every New Year, credit card companies will step up their efforts to lure new customers into their folds. And this time they will come charging at you with more juicy offers than the ones made last year, because they have learnt their lessons from the offers made last year. They will come back tweaking what didn’t work for them last year, so that you find it hard to resist the offer this year. The first rule, as it always has been, is not to trust them blindly. The second rule that can help one be on guard is by sitting to judge the cards by reading the disclosures. Some credit card company tricks that all need to know include:
Pre-Approved: The term “pre-approved” sounds so enticing. The first impression one gets is that it comes with no strings attached. But that isn’t the fact. There are many criteria that need to be met before you can look forward to own the card. And this off course doesn’t mean your credit score and history will not be taken into account. In fact that is the first criteria that you need to meet.
Fancy Terms: Haven’t you heard the adjectives gold, platinum silver associated with credit cards? These are nothing but terms coined for the market. These words are freely bandied to make the cards sound one-of-a-kind. Other such tricky terms include “Important” or “Confidential”. Again these are meant to make the target feel important. Don’t fall for all these. Have a close look at the terms. Have many such looks.
Low Rates hardly exist: This is the most competitive term used by companies to attract customers. Companies are out to make money. And can they make money by offering you less rates? In fact the lower rates are offered to a select few; the ones with a good credit history. Whenever a great rate offer is advertised, take it with a pinch of salt.
Big Bonus Offers: Become a member and you are entitled to 25,000 points or free airline tickets. That’s what some cards guarantee. The truth is to realize this you need to spend a stipulated amount. The catch is; if you are unable to spend $1,500 within the first three months you don’t qualify for any bonus worth its name.
Cash Back Offers: Cash back offers are not entirely misleading. However, there are limits to it. Calculate how much you get back before you decide to spend to get some cash back. For instance, the 5 percent is made top sound very lucrative. However, the spending limit may be limited to $1,000. So you just get to earn $50 cash back. Is it worth it?
Read the fine print to know how you are being made to walk into a trap. Take your time. But make sure you know what you are committing yourself to.