5 Tips To Avoid Misleading Offers From Reward Credit Cards

Reward credit cards are beneficial in many ways because they provide discounts, frequent flyer miles, free hotels stays, and the like. However, beware of misleading offers that may cause you to spend more money than you should. Think about the damage it can do to your credit health. Here are some tips and information to consider.


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1. Prepaid cards are not credit cards

Many credit card issuers often use the term prepaid credit card to mislead people into thinking that these cards are credit cards. In fact, these are simply debit cards that require prepaid balance before they can be used for purchase. In many cases, they are mixed with credit card offers to entice people to use them. You should know better. These cards do not provide a line of credit and are not monitored by the credit bureaus. You may use them make purchases, deposit paychecks, pay bills, and withdraw money from ATMs, but you cannot use them to improve your credit rating.

 

2. Avoid offers of immediate lines of credit

You open your email and see a “You are approved” subject line. As soon as you open the mail, you read that you are approved for an additional $2500 line of credit regardless of your credit score. You are also offered flying miles and restaurant discounts. Due to excitement, you call the contact number. After providing your information and paying the fees, you receive a catalog of merchandises. You find out that you need to purchase at least $400 worth of products before you can receive the card. When you do receive the card, you are disappointed because you can only purchase from a limited list of high price products. This happens in some cases and can get you into real trouble.

3. Zero liability credit cards are not uncommon

Some of credit card issuers use the term “zero liability” to entice customers to use their cards. If you think this is a major offer, it is not. Many issuers already feature this policy. Since it is not uncommon, it is best not to be swayed by such statements. The best thing to do is check the terms and conditions of the card, find out about the annual percentage rates offered, and check for great reward benefits. Instead of simply getting the zero liability “benefit” (which is rather a common offer), get the best offers from other reward credit cards.

4. Beware of deceitful sign-up bonuses

Sign-up bonuses are great, but be careful about these offers because you can get into more debt if you are not aware of the terms and conditions associated with them. Some credit card companies offer big bonuses on their new reward credit cards in order to attract people. However, you should check the spending threshold of these deals. Companies only grant the bonuses once you have spent a certain amount of money within a specified period of time. You would not want to be spending more than you can afford to pay back right away.

5. Is the credit card offer legit?

You should always ask this question whenever a suspicious email creeps into your email account. Many con artists may try to get you to pay them upfront fees for major credit card offers. Remember that card issuers may not necessarily require payment of fees, or at least only a small amount if any. The best way to avoid scams is to apply directly from issuers.

Word of advice

Always check the terms and conditions of reward credit cards before applying. Find out how much you have to spend to get frequent flyer miles, how much discount you get from groceries and restaurants, and what time frame is required to get the bonuses. In addition, check for annual percentage rates to get the best deals.


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Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

7 Comments
  1. I guess this would go under sign up, but a few years ago a cards offers were amazing. Until i recieved it with an already $250 activation. Frowned on it but it was my first real CC, but then the next year another $250 yearly charge. Needless to say cancelled it and learned to always read the credit cards fine print.

    • yes a lot of reward cards do charge annual fees and in the past they would waive these fees for people with good credit and good repayment history with them. Now things have changed and I’ve noticed when I have called my credit card companies asking them to waive the fees only Amex waived it on one card 🙁 I guess that is the new financial reality that we live in.

  2. Always been told “If the offer sounds to good to be true, it probably is”. Also that many credit card issuers try to pull fast ones and prey on people that don’t read the fine print of the contract. Read everything and use common sense!

  3. Credit card offers are a dime a dozen. Remember, if the offers seem to good to be true, they probably are.

  4. Regulations should be tightened more on credit card companies. Many people fall victim to these practices and should be made aware of the protections they have from the FTC!

  5. ‘You’re pre-approved’ is the come-hither tact that bugs me the most about credit card offers. What does that mean?? They’re giving you permission to apply? LOL.

  6. Credit cards are one of those things that are ruining this country. It’s just sad to see those credit cards company tables lined up in colleges and universities to target these students with free T-shirt and measly water battles. Most of them don’t know anything about how credit works and to them it’s just a free T-Shirt. Capitalizing and preying on that is just sad and sorry state of our country.

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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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NHBS Inc © 2022

NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

Privacy Policy Terms of Use

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