The Difference Between Good & Bad Credit
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| Sun, 08-21-2005 - 12:49pm |
Only a year ago, I was recieving credit card offers in the mail daily. You know, the "preapproved" ones? I never applied for them, but before tearing them up I usually looked over what the "bonuses" were, in case one ever caught my eye. (The GM card had been good to me and got me a lil over $2,000 off my vehicle years back, and almost a $1,000 off my roomie's vehicle before I canceled it.)
anywho, so I know they usually had single-digit rates, no annual fees, etc...back when I had good credit.
the past 6 months I have had late payments, cards go over limit, etc....dropping my credit score.
I hadnt noticed when, but at some point the offers for credit stopped.
Now, I have been thinking of applying for a new card witha lower rate, to transfer to as I rebuild my credit.
As luck would have it, I got a "preapproved" offer at 9.9%....not a Great rate, but pretty good next to my 27% cards. So I read it over.
and I am in SHOCk that they even MAKE a card like this!!!
9.9% with a penalty APR of 19.9%.
One-time Fees
Account Set-up Fee: $29
Program Fee: $95
Annual Fees:
Annual Fee: $48
Participation Fee: $72
Additional CARD Fee (if applicable): $20
In addition..if you close your account with a balance still on it, they charge you $3 a month as maintainance.
And thats just the BOLD print....in the fine print they note that every time your account is elegible and approved for a limit increase, there is a $25 fee. well, cards in my past have increased limits as promotions without me asking....so can they just Choose to increase my limit and fine me?
OK, so, the minimum approval amount is $250. the fine print explains that the $72 fee is billed monthly...$6/month.
so. when you OPEN your card, if you're approved for $250...after fee's you have $72 or $52 in credit available!!! and that $6 charge is coming EVERY month whether you USE it or not. it actually TELLS you this on the offer, if you read the fine print. They should just write at the top: "Congratulations, for $244 we'll give you $72."
You're $244 in debt before you've USED, heck, ever even touched!, your card!!!
are there other cards out there like this? like, i know there's cards with annual fees..but this seems ridiculous.
Its true when they say things like "you have to have money to make money" huh? People with good credit get offered "good" credit opportunities...people with lower credit (in June my score was only down to 649, not "horrible") -- get offered this..which will keep them from ever being able to dig their way back to good credit.
I just keep thinking, what if my score was down in the 4 or 500's? Would it cost me $500 for $50 in credit? grrrr
Sorry, had to vent, the vein in my forehead is throbbing.
~ Teresa

Teresa - that card is a classic case of predatory lending.
All my best,
Danni
It's a good thing you read the offer carefully, not everyone does.
Wow! talk about outrageous!
Those are the kind of offers that I take great delight in ripping up. Since you're thinking about shuffling all your credit card debt onto lower APR cards, the best thing to do is to make double-triple sure that all your current payments are on time, and even paying a little more than the minimum for awhile, if you can.
The credit card companies can do that because there are people who don't read the fine print! Good for you for not falling for their 'great deal.'
Lisa