A credit card company is launching a new credit card – we’ll call it ‘credit card A’, they say it’s the best 0% deal available from today, etc, etc….
• 0% for 13 months on balance transfers (3% BT fee) • 0% for 6 months on purchases • A typical APR of 15.9%
The same credit card company has a card on offer already, we’ll call it ‘credit card B’, offering the following;
•0% for 12 months on balance transfers (3% BT fee) •0% for 12 months on purchases •A typical APR of 15.9% •No annual fee
You successfully apply for ‘credit card A’ credit card as opposed to ‘credit card B’ because you think it’s a better all-round deal as the credit card company has said.
Then, over the next few months you make purchases with the card and the rate is 0 per cent for 6 months. After 6 months the money you have spent will be charged at 15.9 per cent APR Typical.
However, any payments you make will still be paying off the balance you have transferred and not the purchases made. Unless of course you manage to pay off the entire balance transferred.
This is because the credit card company will be making 15.9 per cent Typical APR from the purchases you have made and they want this debt to stay on the credit card for as long as possible, so they make more money in interest charges. Therefore the credit card company will reduce the balance you have transferred until it is paid off before the purchases are repaid.
If you don’t spend anything on the card then it makes no difference, infact the ‘credit card A’ is probably a better option because you have 13 months rather than 12 months 0 per cent on balance transfers. But with the best will in the world how many of us actually NEVER spend a penny on the new credit we’ve got because of a 0 per cent balance transfer rate??
If you are annoyed by the constant credit card junk mail that you receive, then you are not alone. People all over the country are receiving literally dozens of credit cards offers every year, most of which are misleading or not applicable to them. If you want to know how to deal with these credit card mail offers, then here are some tips.
Why get so many?
Whether or not you have a lot of credit cards, you get sent so many offers because of your specific credit rating. Whether you have a good or bad credit rating depends upon the types of offers you get, but whatever your rating you are a target for credit card companies to be sent offers. Some people will receive nearly 10 of these offers every month, many of them duplicates.
Bait and switch
Although some of the credit card offers you get might seem tempting, they usually not what they seem. Most of these offers employ the technique known as 'bait and switch'. This is where you will be offered a great deal in the mail such as ' you are pre-approved for a credit card with up to ?25,000 limit', but when you fill in the paperwork and send it back you only get ?1,000 at an incredibly high interest rate. This is not illegal because they only said 'up to' a limit and so even if they had refused you it would not be against the law. This technique may not be illegal but it is clearly immoral. This is one reason why you should avoid such offers.
Opting out
Although it isn't the easiest thing to do, you can attempt to opt out of receiving these mail offers. There are companies that you can apply to that will help you to be removed from these mailing lists, although you are still bound to receive some offers. You can always try calling the credit companies themselves and asking them to stop sending you mail, although this usually falls on deaf ears.
Keeping your identity safe
Even if you don't want to look at any of the offers you get through the post, it is important that you properly dispose of the offers you get. If you simply throw the offers in the bin, then someone could take them and apply to the cards you have decided not to look at. Before you know it you could get a bill in the post for thousands of pounds for a card you didn't even apply for. Make sure you shred or tear up all credit card mail offers to protect yourself from identity theft.
Don't dismiss them all
Although most of these offers will not be worth looking at, you shouldn't simply throw them all in the bin. There really are some genuinely good deals to be had from credit card mail offers. This is especially true if they are from a company which you have a card with, as they might offer you preferential terms. If you are careful with credit card mail offers and can separate the good from the bad then they will be a benefit to you rather than a constant annoyance.
Both Simon Duffy & Peter Kenny are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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