Travel the World!
By Will from Holland
Have you heard this airline credit card promotion?
Sign up for our airlines' credit card now, and we'll give you a free round-trip ticket to anywhere in the continental USA! Plus... We'll give you 5000 bonus miles on top of that! Yes, these miles can be used to get more free tickets.
Let's have a look at these claims!
They give you the 5000 free miles, but did you know that is not enough to buy you a free trip.
A lot of these credit cards require you to spend a lot of money before you get the miles. On some credit cards, you have to spend up to $100,000 to get a free trip from New York to Washington, DC. Wouldn't it be cheaper to buy the actual ticket in the first place? This tells you not to get a credit card because of the "free" stuff they "give" you.
Do you understand credit cards' terms & conditions?
A lot of "free" credit cards have misleading fine print. Here are a few:
- High Fees. Some credit card companies charge you an annual fee of $100 to use their card, while others are free.
- High Interest Rates. On a lot of the free credit cards you can be charged an interest rate of 19.9% or more, even when you deserve a lot lower rate. Some of the worst cards can charge you 35%!
- Quick Trigger Late Fees. If you are a day late on your payment some credit card companies will charge you a late fee of $25-35.
- Penalty Rates. If you are a day late on your payment some credit card companies will bump your interest rate up from 17% to 25%. If you do it again, you're charged 35% on your next bill!
Young people are many credit card companies' favorite victims. Don't fall for their scams.
Here's a hint: "Sucker Punch!"
"Sucker Punch" is an interactive FoolProof Solo module on credit cards.
The "Sucker Punch" module gives you the down and dirty on all the credit cards out there.
Want to know more?
Head to FoolProof Solo right now:
- Head to your credit union's FoolProof page.
- Click on "FoolProof Solo" and sign up.
Watch the videos, and learn to avoid sucker punches when it comes to credit cards right away. And check out Sylvester's music while you're there! Just click on his bio.
Other Credit Card Scams?
"We guarantee you a credit card!"
Trouble is, they don't tell you the details of their credit card until your card arrives in the mail. The ad said "Up to" a $2000 credit limit. In most cases they give you a card with a $20 limit.
"Special student interest rates!"
One national bank as of a few weeks ago was charging 15% interest for their "special" student credit card. The student card rate at this credit union for most people is a lot less.
"Your rate is locked-in with us!"
They may say your credit card interest rate is fixed, but look at the fine print. Many times the rate can change after ninety days and be raised, even if you pay on time!
"Got credit problems? We've got a card for you!"
These companies want people who have credit problems to get their cards. Why? They want to charge you double in interest, just because you think you have credit problems.