Credit Cards And Scams
Advance Fee Credit Cards
Some companies promise to get you a credit card no matter how bad your credit is .
Here’s what can happen if you pay them the $200 or more they usually ask for:
You receive a credit card that’s only good for over-priced merchandise from their catalog .
You get applications for secured credit cards .
a secured credit card offer requires you to deposit $500 in a bank account to receive a credit card with a $500 limit .
You receive nothing at all .
Secured credit cards from a legitimate bank or credit union can help you re-establish credit .
Many banks and credit unions will give you a secured credit card with no upfront fees or charges .
If you want one of these, go to your own bank or credit union and apply for one .
Other scams involve credit cards with a low credit limit of $300 or so .
the bank making the offer charges you an application fee, a processing fee, annual fees, a rush approval fee, and a high interest rate that starts the day you open the account .
These charges may eat up as much as 90% of your credit line! Remember, if you want a secured credit card, go to your own bank or credit union and don’t pay excessive fees.
Instant Loan Checks…. .
There is no free money
Instant loan checks often come to you in the mail .
They look like a bank check but are really a loan .
the letter that comes with the check tells you that all you have to do is sign the check and cash it .
When you sign the back of one of these checks and cash it, you are actually signing for a loan and agreeing to make payments on the loan with interest .
to find the interest rate, monthly payments and other costs, you must carefully read the letter and the other papers sent to you with the check .
Consumers often mistake these checks for benefits or reimbursements .
After they cash the check, they find themselves with a high-interest loan they didn't want, didn't need, and couldn't afford .
the rate of interest charged by the lender is often higher than what is stated in the cover letter .
If you can’t make the payments, the lender may ask you to take out a new loan and secure it with your home .
Before signing and cashing a check, be sure you know the following:
Who sent the check and why?
Read the letter that comes with the check .
Be sure you understand what you’re committing to by signing and cashing the check .
If you don’t understand the terms, call the sender and ask questions .
Destroy checks that you don't intend to use it so no one else can cash them .
Credit Repair Companies
Credit repair companies promise to improve your credit .
They may also promise to get you a loan or a credit card .
They lead you to believe they have special ways to get negative information off your credit report .
They don’t.
Credit repair companies have no special powers to improve your credit .
There is nothing they can do for you that you cannot do yourself .
Paying them leaves you less money to pay your current bills and past debts .
Because of the problems with credit repair companies, strict laws were passed to regulate their activities .
For example, they must provide a written contract that you can cancel within five days .
They can’t require payment in advance, and all promised services must be completed in 90 days .
They must also register with the Department of Justice and file a $100,000 bond with the Secretary of State .
Be aware that very few credit repair companies follow the law.
Advance Fee Credit Cards
Some companies promise to get you a credit card no matter how bad your credit is .
Here’s what can happen if you pay them the $200 or more they usually ask for:
You receive a credit card that’s only good for over-priced merchandise from their catalog .
You get applications for secured credit cards .
a secured credit card offer requires you to deposit $500 in a bank account to receive a credit card with a $500 limit .
You receive nothing at all .
Secured credit cards from a legitimate bank or credit union can help you re-establish credit .
Many banks and credit unions will give you a secured credit card with no upfront fees or charges .
If you want one of these, go to your own bank or credit union and apply for one .
Other scams involve credit cards with a low credit limit of $300 or so .
the bank making the offer charges you an application fee, a processing fee, annual fees, a rush approval fee, and a high interest rate that starts the day you open the account .
These charges may eat up as much as 90% of your credit line! Remember, if you want a secured credit card, go to your own bank or credit union and don’t pay excessive fees.
Instant Loan Checks…. .
There is no free money
Instant loan checks often come to you in the mail .
They look like a bank check but are really a loan .
the letter that comes with the check tells you that all you have to do is sign the check and cash it .
When you sign the back of one of these checks and cash it, you are actually signing for a loan and agreeing to make payments on the loan with interest .
to find the interest rate, monthly payments and other costs, you must carefully read the letter and the other papers sent to you with the check .
Consumers often mistake these checks for benefits or reimbursements .
After they cash the check, they find themselves with a high-interest loan they didn't want, didn't need, and couldn't afford .
the rate of interest charged by the lender is often higher than what is stated in the cover letter .
If you can’t make the payments, the lender may ask you to take out a new loan and secure it with your home .
Before signing and cashing a check, be sure you know the following:
Who sent the check and why?
Read the letter that comes with the check .
Be sure you understand what you’re committing to by signing and cashing the check .
If you don’t understand the terms, call the sender and ask questions .
Destroy checks that you don't intend to use it so no one else can cash them .
Credit Repair Companies
Credit repair companies promise to improve your credit .
They may also promise to get you a loan or a credit card .
They lead you to believe they have special ways to get negative information off your credit report .
They don’t.
Credit repair companies have no special powers to improve your credit .
There is nothing they can do for you that you cannot do yourself .
Paying them leaves you less money to pay your current bills and past debts .
Because of the problems with credit repair companies, strict laws were passed to regulate their activities .
For example, they must provide a written contract that you can cancel within five days .
They can’t require payment in advance, and all promised services must be completed in 90 days .
They must also register with the Department of Justice and file a $100,000 bond with the Secretary of State .
Be aware that very few credit repair companies follow the law.
Credit Cards And Scams
![Credit Cards And Scams]()
Reviewed by Henda Yesti
on
December 31, 2017
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