Beware Offers That Aren't So Special - Knowing when you're getting a fair deal

Have I Got Something For You

Wow, you've just been offered a big name credit card at 2.9% APR (annual percentage rate)! Wait a minute…that rate isn't good for a year. Because if you examine the fine print, that is an introductory rate for six months only, with a number of conditions and other, much higher charges, including:

• You must transfer a credit card balance to the new account, or your rate is 11.9%, which is what it rises to after six months, anyway.
  Cash advances are 18.24% APR

• A late payment once in your introductory period is 11.9% on all purchases

• Late twice in any six month period, and it's 19.99% on ALL balances

• All APRs except the introductory and late payment rate, are variable

The grace period is only 20-25 days.

Even if there is no annual fee, this may not be your best bargain in a credit card, so shop around. It is irrelevant if you always pay your balances off before the end of the grace period, but what happens when you can't? 

This One Looks Better In Your Wallet

The X credit card company has just notified you that you're now qualified for their Gold Card, as a valued customer! They really value your business, because that gold card will cost you more in fees, and what benefits are you going to get? Any or all of these frills:

• A waiver on car rental after collision damage

• Roadside assistance

• Travel insurance

• Extended warranty on purchases

• Higher credit limit

• Frequent flyer miles

But are you already getting these perks elsewhere, or could you if you tried, without spending as much? The American Auto Association offers roadside assistance. Many auto policies cover the car rentals after an accident. And if your credit record is good, you could very likely get a higher limit if you asked for it. So it's up to you…are the prestige and perks worth the extra cash?

At Least They Don't Need a Ride Home

Credit monitoring, is basically a babysitting service for your credit history. They will offer a variety of options/benefits, including:

• Quarterly reports on changes in your file, which could be inquiries, new accounts opened, or claims/negative reports

• Free reports as often as you want

Do you really need that? Not at all! You can get a free copy of your credit report from the three major CRAs by signing up at Free Credit Report.

Just Sign Right Here and Your Problems Are Over

Debt relief fraud preys on the person who feels trapped by their debt load, with nowhere else to turn. So when an offer comes along to erase that bad debt, or consolidate your debts into one low monthly payment, they often jump at the chance, only to find they are out of the frying pan and into the fire when they end up paying exorbitant fees and interest rates. There is no magic cure for bad debts, and consolidation is best negotiated with the help of a credit counsellor, which is often free.

An offer to consolidate your debts into one loan for a fee, is more often a scam than not. Asking for money up front to guarantee a loan you badly need, is also likely to be a fraud. No reputable institution will ask for a fee to guarantee a loan, because they can't guarantee them. They can require an application fee, but you need to check with the institution themselves, to ask if that is their policy, and how much the fee is.

Another popular fraud is the seminar where kits are sold to pay off debts or mortgages. These "kits" contain documents that look like cheques, but are called drafts. People are told they can be made out for any amount, but doing so can get you charged with the issuing of a false instrument.


The bottom line is: use your common sense. Read all the fine print. Ask lots of questions. And if you don't like the answers, then say "no, thank you". Many of the services you are asked to pay for to protect or maintain your credit record, are available at no cost. Including the free credit report available by signing up at Free Credit Report.