Offers for lower credit card rates are usually not a scam, but they can be a little misleading. If a credit card company advertises a rate lower than 10%, in most cases they are talking about an introductory rate that will go up after a set period of time. Introductory rates are not a scam, but you need to be very aware that the rate is temporary and that you will be responsible for the normal, and often much higher, rate as soon as the introductory period ends.
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Another misleading thing about credit cards that promise lower rates is that not everyone qualifies for the lowest rate advertised. The rate a credit card company advertises assumes that the applicant will have excellent credit. If they have worse credit, the rate will be higher. Another thing to bear in mind is that credit cards with great interest rates sometimes balance that by charging high fees, having low credit limits, or offering no rewards.
The Danger of a Credit Card with an Introductory Rate
When a credit card offers a great introductory rate, sometimes even a zero percent rate, it can be hard to see a downside. There are, however, dangers associated with introductory rate offers, just as there are dangers with any offer of credit. Most of these dangers can be put to rest with a little self-control.
An article from Finance Globe asserts that the biggest danger of credit cards with introductory rates is that of overspending. Realizing that carrying a balance isn’t costing you anything for six months to a year, you might be tempted to buy more than you can really afford, saddling yourself with more debt than you can reasonably hope to pay off in time. To get maximum benefit from an introductory rate, you need to only charge what you can pay off before the rate expires.
Some people fail to calculate or remember the length of the introductory rate correctly, leaving them with a substantial balance when the introductory rate ends. When that rate ends, the real rate kicks in, and it could be 15% or even higher, leading to quite a hefty interest charge if the balance is full.
It is possible to be hooked on revolving credit through introductory rates. People see that their rate is about to expire and immediately find another introductory offer to switch their balance to. This trick may work a few times, but if you aren’t paying down the debt, eventually you are stuck with a full credit card rate and a lot of debt when the last introductory offer runs out.
Credit Card Scams Out There
While there are still some websites that may pretend to offer a credit card to scam you out of your personal information, this is by far not the most popular type of scam out there involving credit cards. Most credit card scams these days involve criminals trying to steal your existing credit card information.
To get your credit card information, thieves may go through your garbage, use a hand scanner to read a chip in your card, read your card information over your shoulder in the checkout line or simply steal your wallet with your cards inside. There are also hundreds of ways a thief could try to steal your credit card information online, although Scambusters.org claims that it’s actually safer to use your credit card on the internet than it is to hand the card to a waiter.
Staying Safe from Credit Card and Identity Thieves
Scambusters.org offers a few tips to keep your credit card information safe, although most of them should be simple common sense. They advocate keeping your physical card in sight at all times when using it, never giving card info over the phone unless you initiate the call, never typing card info into an unsecured website, and never responding to emails from anyone requesting credit card information. They also recommend shredding credit card documents and immediately reporting any unusual activity on your credit card statement.
In terms of identity theft, the most important thing you can do is to regularly check your credit report. If something shows up that you do not recognize, contact the credit bureaus immediately. Another tip is to shred any credit card offers or any unused documents that have your social security number on them.
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