Surprise Balance Tranfers
A “pre-approved” credit card offer that comes in the mail may
have an unhappy side effect. Sometimes, the fine print reveals that if you
accept the offer, you must transfer your balance from a card you already have
to this new card.
And if you read the rest of the fine print, you’ll find that the new
card just so happens to have a higher interest rate than your current card.
Because this information is spelled out in the offer, the automatic balance
transfer is legal and you’ll have little recourse if you fall for
it. Consider it yet another reason to grab that magnifying glass before
you accept any offer.
A variation on this scheme: Some credit card issuers buy old debts from other
consumer lenders and then offer “new” cards to the people in debt.
If those people say yes to the new cards, they’re surprised to find,
on the first statement, a balance that includes the old debt.
Again, these deals are usually explained in the fine print on the back of
the application for the new card. Look for phrases like “reaffirmation
of existing debt,” “automatic transfer of other balances”
or “authorization to the transfer balances” in the application
for any credit card. If you see this language, think twice before mailing
it.
Also, beware of telemarketers offering to transfer your credit card balance
to a new card with a wonderfully low interest rate. Some identity thieves
use this technique to get their hands on your credit card information and
other personal data.
If someone calls with a really tempting offer, ask to have it mailed to you.
Genuine credit card issuers understand consumers’ reluctance to give
out personal information over the phone. If a caller is pressuring you, insisting
that an offer is only available over the phone, consider that caller a scam
artist.
Next: Changing Terms |
