How To Spot Credit Card Scams

By Darren Allsop.

Most people don’t realize how common Credit card scams are. Many companies target the consumers with less than perfect credit or those with badly damaged credit. For those consumers companies are not banging down the door to offer you a credit card with a great deal.

The unfortunate thing is the offers from these credit card companies seem like legitimate offers. Usually the credit company will give you offers that include astronomically high interest rates, steep fees and other crazy terms.

In the mail you might receive pre-approved credit card offers from different companies that disguised them as valid Visa’s or MasterCard’s. But in actuality they are offering cards that good for only store clubs or catalogue clubs. Usually their sales pitch informs you that you have received pre-approval for a credit line of up to $5,000 and they require no security deposit. They are targeting you by giving you the sense that you are restoring your credit and getting the taste of once again having the convenience of having your own credit card.

Because you may be desperate to own a credit card you may ignore the fact the offer sound too good to be true and jump on any offer you receive in the mail. Make sure that you really read all the fine print in these offers you receive in the mail. Before you commit to anything look very thoroughly through the offer.

Most credit card scams start with a great opening line like, “you have been pre approved for a MasterCard with up to a $5,000 credit limit”. They try to make it sound very simple. They ask you to check the printed information on the application and make sure all the information is correct. Then just sign the application and mail it back to them. Then they will verify your personal information and promptly mail out your new credit card.

If you have carefully read over their documents you have realized that this is not a regular MasterCard. This card is limited to purchasing items that are from either their online store or at a special online catalogue. You will not be able to purchase anything else by using this card. Meaning you cannot go to a local restaurant and charge your meal. What the online stores generally sell is off brand products like electronics or household items.

The usual catch to the scam can be found by further reading the offer. They usually require you to mail them a money order for $299 to activate the offer. They usually offer reassurances that you will get that money back with special offers or discounts from the company when you make your first purchase on your new credit card. Annual fees of additional hundreds of dollars are also added to the credit cards by some of the companies out there, and that is on top of the of the extremely high activation fee. Hopefully the more you read the less appealing the offer sounds.

Most of these types of credit card offers will charge you upward of 45% interest, which is obscenely high. So it is vital that you have read all the information contained in credit card offers.

The best advice you can receive for an offer like this is to just throw it out! Your money would be better spent on getting a secured credit card instead of paying their activation fees. You can easily get a real Visa or MasterCard with a security deposit. And by going the way of a secured credit card you will actually begin repairing your credit through the major credit bureaus. Make sure you keep this in the back of your mind when you find credit card offers in your mailbox.

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