Avoiding credit card scams
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When you are looking to get a new credit card you can feel pretty vulnerable. There are a lot of things you have to consider and a bunch of terms that are unfamiliar. It can all be pretty overwhelming. Unfortunately, there are unscrupulous people who will prey on you when you are vulnerable and take advantage of you. Credit card scams are everywhere and they can cost you a lot of money if you get caught by them. Here are three of the scams that you will often see. If you can recognize them you can avoid them.
Cards that demand fees in advance. This is one of those cases where something that sounds too good to be true probably is. In this case, people will offer you some really good terms, like low interest rates or good repayment terms. All you have to do to get this deal, which is better by far than any other you have seen, is pay a fee in advance. They will tell you that this fee is to get you pre-approved or to pay for the paperwork that is required to get the card. A reputable bank or credit card company will never ask for this. Once you pay the fee, the scammer will disappear and you will never hear from them again. Don't fall for this. Never pay in advance for a card.
Debt suspension offers. What this means is that, if something comes up that means that you can't make your payments like an injury or job loss, you don't have to make monthly payments. You have a chance to get your finances under control before you start making payments. Interest isn't applied to the balance, but it does mean that you can't use the card. Where the scams come in, though, is that banks often use this as an extra feature with your card. They offer it themselves, so they don't use an insurance company. Scammers will prey on you by posing as insurance companies and offering you insurance that you don't need. You pay for it, but you probably couldn't claim anything if you needed to.
Credit protection. It seems like a good idea - if your card is stolen or used without your consent and someone runs up a big bill, you won't have to pay. That's what scammers will offer you for a fee. The problem is that you already have this if you have a credit card. Federal laws limit your liability in the case of theft to $50. Your credit card company likely won't even ask for that if you report the card stolen as soon as you notice it missing. In other words, you are paying for something that you don't need.
Posted by jonathan on December 26, 2005 at 11:42 AM