The Liars and Scammers of the Credit Card Industry
In the world of credit cards, there are plenty
of people who are desperate to borrow money, and
just as many people who are desperate to get back
out of debt again. Given that, it’s not surprising
that the industry is full of scams. Here are some
to keep an eye out for.
The Debt Advisors.
Be very careful if you’re offered ‘free
debt advice’. There are many government bodies,
legitimate financial companies and charities that
give good advice, but the ones who do a lot of advertising
tend to be owned or partnered with people you don’t
want to know. If the advice you get is to sign up
for another loan from one company in particular,
don’t believe it – the chances are that
the person you’re talking to is just a salesman
in disguise.
The Identity Thieves.
If you don’t keep track of your credit card
statements and your credit report, then you could
be in for a surprise. It’s not that hard for
someone else to apply for a credit card, pretending
to be you, or to get the number of a card you already
have and start buying things with it. Then, of course,
they get free money, and you’re left with
the debt, not to mention the black marks against
your name when it doesn’t get paid back.
The Catalogue Card.
This is a scam that’s especially common around
Christmas time. A company offers you a ‘credit
card’, with a much higher limit than you’d
usually qualify for. The catch, of course, is that
you can only use it to buy things from their catalogue,
at inflated prices. This is nothing but a clever
way of offering you expensive finance on purchases
from them.
The Only Game in Town.
More exploitative lenders might realise that they’re
really the only company that’s going to be
offering some people any credit at all. They’ll
send offers to desperate people for absolutely terrible
deals, with the highest interest rates they can
get away with, and no benefits whatsoever. These
people will accept the offer without even reading
it, relieved that finally someone out there offered
them credit – and their debts get even harder
to ever pay off.
The Insurance Charge.
Here’s one that even the most reputable lenders
go in for – trying to sell you useless insurance.
This is usually an insurance premium that is automatically
added to your interest each month, and covers you
against very unlikely things, like dying and not
being able to pay back your debt. It is almost never
worth ticking the box to buy insurance.
The Secured Credit Card.
A secured credit card
is one that requires you to make a deposit before
you can use it – a deposit that can sometimes
be as much as the limit on the card itself. Secured
cards can be a good way of rebuilding your credit
when it’s all gone wrong, but don’t
take one from a lender you’ve never heard
of. With more unscrupulous companies, you will often
be charged an annual fee, an application fee, and
any other fee they can think of, all of which are
added to your debt. Don’t let it happen to
you.
Credit Card Resources
Unsecured Credit Cards for bad credit
Reward Credit Cards (good credit required)
Guaranteed Approval Pre-paid Credit Cards
Payday Loan Companies
Secured Credit Cards
About the Author
Liz Roberts is a loan consultant with NewHorizon
Finance and has been providing consumers
and business owners with financing since 1989.
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