bad-creditToday’s society relies so heavily on credit and debt to function it’s almost comical.  My great-grandparents didn’t have a credit card and neither did my grandparents.  Only when they were forced to get some sort of plastic, did they.  And they did just fine. For decades.  I have personally opted out of receiving credit card offers, but I know plenty of people who haven’t.  And they receive dozens of these offers on a weekly or monthly basis.  It’s almost criminal the tactics these credit card issuers use to get people to sign up and they prey on those with less than perfect credit.  Those are the offers that everyone must be wary of.

To OPT OUT of receiving credit card offers (and I highly recommend this) go to:

www.optoutprescreen.com

or call: 1-888-5-OPTOUT (567-8688)

There are many companies will send a credit card offer of “easy credit” to “pre-qualified” recipients.  They offer to “build or rebuild” What they don’t tell you, unless you read the fine print in the offer is that they’re going to immediately tack on upwards of $179++ worth of fees and charges to your account before you even purchase anything.   They will offer what seems to be a great rate, most often 9.9%, but this is an introductory rate.  After the introductory period, the rates rise to on average 24.9%.  Even the “pre-paid” cards, cards that you put money on and cannot use until there is money on it (think debit card) are taking advantage of people almost as much as those extending credit to those that have less than perfect credit.  Everything that you do whether it is ask about your balance, call into the center for help, get money from the ATM, or make a purchase over the phone – many will charge you for the same things that you can do with your bank debit card for free.

Be careful when applying for these cards.  Before you begin applying for cards to “re-build” your credit after a divorce, accident, disability, or injury, make sure you pay your old bills first.  Getting a new credit card with outrageous fees is not going to help you.  What it’s going to do is get you a little deeper in debt and you’ll be paying a company for the “privilege” of carrying their piece of plastic in your wallet.  Rebuilding credit is a time consuming process.  It will take a while for you to get back to a reasonable credit score if you have slipped and your credit score has dropped.  Do not believe any company that tells you otherwise! 

Here are a few companies to be wary of.  These companies/cards will charge you fees before you even charge anything on the card.  So they’ll really send you a card with a bill already attached before you even activate it!  Your card will come with money already on it for you to pay.  And there are MANY more out there than those I have listed.  I have noticed that there are more today than there were when I was digging myself out of my financial hole and this is sad.

Also, as you’re reading these crazy fees, think about this – most of these cards will only extend you a credit limit of $250 to begin with.  So, most of the time, you’ll be over your limit before you even activate your card. They can, by their standards, charge you an over the limit fee before you even activate the card!

First Premier Bank GOLD card – Offers subprime credit cards

·         Fee Breakdown:

o   Account Set up:  $29

o   Program Fee (one time fee): $95

o   Annual Fee (charged once a year): $48

o   Monthly Servicing Fee (charged once a year): $84

o   Additional Card Fee: $20 per year

§  Total that will come as a bill on your card when you receive it: $256. $276 if you get an additional card for a loved one.

Total Visa Card – Offers subprime credit cards

·         Fee Breakdown:

o   Account Set-up Fee: $56

o   Program Fee (One time fee):  $96

o   Annual Fee: $48

o   Monthly Service Fee: $8

§  Total that will come as a bill on your card when you receive it: $208

Centennial Classic MasterCard – Offers subprime credit cards

·         Fees Breakdown:

o   Account Set-up Fee: $29

o   Program Fee (one time fee): $95

o   Annual Fee (charged once a year): $48

o   Monthly Servicing Fee (charged once a year): $84

o   Additional Card Fee: $20 per year

§  Total that will come as a bill on your card when you receive it: $256. $276 if you get an extra card for a loved one.

 

All Access PrePaid Master Card – PRE-PAID CARD

·         Fees Breakdown:

o   ATM Fee: $2.00

o   Purchase at a store: $1.00

o   Purchase online: $1.00

o   Telephone Purchase: $1.00

o   ATM Withdrawal: $2.00

o   ATM Balance Check: $.50

o   Paper Statements Request: $5.95

o   Replace Card: $5.95

o   Inactive account: $5.95

·         I wanted to note that this was one of the craziest pre-paid card I have ever seen.  They charge you $1.00 for using the credit card as it’s meant to be used – for purchases!  And if you don’t use your card, they charge you for it!

o   Total fees for everyday transactions: $25.35

Note about the author:

I have personal experiences with these types of credit cards and fell into their traps a couple of times.  I was able to, fortunately, dig my way out and eventually rebuild my credit that was already on shaky ground, but it took me years of negotiating with companies, closing cards that were charging me upwards of $100 a year just to have their card and in the end, what helped me rebuild my credit was hard work, paying off old credit accounts and paying my bills on time.  The credit cards that promised to rebuild my credit did nothing more than hurt me financially even more.  My advice? Don’t fall into their traps!  They aren’t out to help you – they’re out to make more money on those less fortunate.

For more information on opting out of credit card offers and much more, please visit: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt063.shtm.

 

*All information on these sub-prime credit card offers provided by www.credit.com, 4-3-09.

Our Random Articles

More Links