Buyer beware of the 'Instant credit card approval' offers!

Sometimes in life, it takes a few walks around the block to get the world figured out a little better than you had when you were in your teens. When we hear about 'scammers', we tend to think of some character, lacking in basic ethical standards, who makes a living fleecing trusting, old ladies and such. In today's snail mail, among the junk mail, I received one of those 'Instant Credit Card Approval' offers - You've been pre-approved! .... I was just about to toss it in the round file when I decided to write a piece on this type of corporate scammer. Hey, it's my duty! Way back in the day, when I was young as were the credit cards I fell for one of these schemes and lived to pay for it. So consider this an expose of just how bad some of these instant credit card approval 'offers' can be.

I opened the envelope to find the usual cheery letter, addressing me by my first name. Warm and fuzzy, I guess. Emblazoned across the first line, in bold, red lettering was You've been pre-approved! The opening text read, Couldn't you use an extra $500 line of credit? Just tell us a little bit about yourself .... Young people are particularly vulnerable to this type of rhetoric, as are some of us who are older and desperately trying to make ends meet.

The application form was short. I guess being pre-approved means they already know what they need to know and the application is but a formality. They do need your signature. Easy as pie. Fill it out in two minutes, sign it and send it off.

In fine print, at the bottom of the instant credit card approval application, print so fine that I needed to get my reading glasses to discern, there was a statement saying that, by signing, I agreed to the terms and conditions specified on the reverse of the letter. Turning the page over, it was immediately apparent that there were a heck of a lot of terms and conditions, also requiring the use of my reading glasses.

Here's where you get the real scoop on what the typical instant credit card approval offer means. I'll try to keep the long story short. An Account Set-up Fee of $29 was a condition of extending credit and was a finance charge as well. Gee, how can they charge a finance fee when I haven't yet used the card? Hmm. Then there was a Program Fee, also a condition of extending credit and another finance charge! Oops what this? An Annual Fee of $84 pays for 'continuing the account', billed at $7 per month. I'm told this is another finance charge. If I want an extra card for my DH, that's another $20. My $500 is disappearing fast! What else? If I want to check my account online, this convenience will cost me $3.95. These guys want to nickel and dime me into debt! This is also a finance charge. If I'm good and pay everything on time, I'll be eligible for a credit limit increase, for which they'll only charge me $25.00! At this point, I'm ROFL.

I think the clincher on this instant credit card approval offer was the caveat at the end of the terms and conditions agreement. In case I were not approved for the $500 credit limit immediately, I would receive a minimum credit limit of $250. Now let's do the math. This means that upon issuance of the $250 credit card, I'd have $51 of buying power when I got it, owing $199 before I even signed the card.

Now, the figures I've quoted are just one bank's idea of marketing the instant credit card approval offer. They are not the only ones out there, ready to saddle you with $200 of instant debt! Buyer beware! Read all of the fine print.

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