Now I always have to be cautious when I use the terms “junk mail” when it comes to daily mail we receive that quickly goes into the mail, as my father-in-law works in a shop where they print coupons, so I try to at least open and look before I send to the recycle bin, but fortunately he doesn’t work with credit card offers so I can trash that all I want. Whether you have poor or perfect credit, the offers will pour in either way, saying you’ll be approved for the best rates on the market, or will approve you to rebuild your credit and charge astronomical fees in the meantime. Either way, there are tricks that credit card companies try to use to lure you into signing up for their offer.
Too Attractive Rates
No matter if it’s your first credit card or one that you are looking to improve upon compared to the one you currently have, the most important aspect and way the offer sticks out the most is the interest rate. Sure, if you should pay off the statement balance by the due date, but the off-chance you go over you don’t want to be paying 16% interest when you can pay 8%. The problem with the offer is that it will look like you will get a great rate, but in fine print it says upon approval, and the range could be 5%-17%.
Dressing Up Card Names
Upon the many offers you will see trickle in, you will not only see just about every brand that comes in, but they try and dress up the card names by calling them “gold”, “silver”, “platinum” or “diamond”. Do you know what these names mean? Absolutely nothing, it doesn’t put you in any elite club, it’s just a way of making the card sounds important so that you will choose that over the many others and sign up. Don’t fall for the name trick and just pay attention to the most important thing: the interest rate.
Rewards Too Good to Be True
Just about in everything else in life, if it’s too good to be true, then it probably is. Rewards are a huge reason why using a credit card makes financial sense. You actually earn money back from making the normal purchases that you would make anyways. They try and lure you in by saying you will receive statement credits if you sign up, but you have to pay attention to the fine print and you probably have to have the card open for a certain period, meeting minimum spending limits each month, which may be out of your league of affordability.
You Were Personally Selected
Sometimes it’s nice to feel wanted or needed, and that’s what credit card companies are trying to do when they send you “exclusive” offers. You open and think to yourself, “wow, they picked me out of everyone, I should sign up” when in fact that is not the case at all. No matter the “pre-selected” or “pre-approved” card that you are sent, you still need to go through credit approval process, so there is no guaranteeing any rate and terms just on an offer that comes in the mail.
Beware of Annual Fee
We are consumers are already paying a considerable amount of interest on a charged balance, could be upwards of hundreds of dollars depending on the balance (which could be another problem where you need to look at reducing expenses), that you don’t want to be charged any additional money. Annual fees are picked up and charged to your statement yearly just for having the card, so depending on that fee, you could probably find a better interest rate and reward perks with another charge that does not charge an annual fee. To me, the credit card companies should be fighting over our business, so I’m certainly not going to pay to join their club.
Read Fine Print Before a Balance Transfer
Much like anything before you sign, you should read all of the fine print. If you are currently carrying a balance with a high interest rate, a balance transfer could make sense to get a low or no interest rate for a period of time to allow you to pay off more quickly than you were with the current card and the interest rate. Whatever you do, stay away from paying just the minimum, as that will just cover the interest and do very little to the balance, taking decades to pay off that route.