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Look Again at Credit Card Offers

July 6, 2014
Plain English Version

The news is good and bad. Credit card companies are sending consumers aLook again at credit minefield of offers. The number of offers is skyrocketing. That is because credit is becoming looser as the economy improves.

Some offers are great if you have a credit score of 725 or better. However, many offers come with catches that you need to be aware of.

Companies have stopped selling you other products such as identity theft, debt cancellation and protection from job loss.

They have lots of other ideas.

Here are things to take into account as you read offers.

Balance transfers. Companies are offering new customers the chance to transfer their balance from other credit cards for zero-percent interest. Watch out for transfer fees which may range up to three percent to five percent of the transferred amount.

Zero percent interest. Many cards are offering zero-percent interest on purchases for a year or more. Watch out for limitations on the amount and the type of purchases you can make. Beware of a sentence that says if you are late on one payment, the whole zero-percent deal is off.

Convenience checks. These are checks tied to your existing credit card. They sometimes carry an interest rate that is higher than the card itself. Consumer advocates do not like them.

Preselected offers.  When you get preselected offers, it means you have been approved for some amount of credit. You may or may not get the full amount in the offer. If you don’t get the amount of credit you want, keep looking around.

Cash-register come-ons. Offers at checkout counters and kiosks can be tempting. It may be very hard to convince the company that you are a good credit risk. They do not know who you are when you fill out the application. They will ask a lot of questions and may offer you less credit than you think.

Cash-back cards. These cards offer to return a percentage of your purchases to you It is very popular. Be sure you understand the limits, the type of products and whether the offer includes products and purchases that you typically buy. For example, if you don’t have a car, cash-back for purchases of gas will not be relevant to you.

Companies want your business – at a price. Be a wise consumer.

Source: The Wall Street Journal June 27, 2014

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