Credit Card Traps: How To Spot Them On The Spot!

They get in your mail - a obvious looking mail piece from some "official looking" bank claiming that you have got got got been Pre-Approved for a Mastercard or VISA credit card.

Of course, you don't have to have any credit. You can even have got got bad credit or have just filed bankruptcy or even be rated as a "slow payer."

It doesn't matter because these companies desire to give you a second chance! These companies desire to do it easy for you to obtain a credit card because they only desire your money!

How the thing plant is that you must direct $35 to have got an application that supplies you with a name and computer address listing of banks willing to give you a VISA and/or Mastercard without any credit approval.

That's a stiff terms to pay for a sheet of paper, don't you think?

The instruction manual that come up with the application will allow you cognize how the strategy works.

You must open up up a bank account with the bank once that bank O.K.s you.

Big deal!

They make it look that you have won some competition or something and people will experience "good inside" that person have approved them.

But that's not all....

The minimum amount you must lodge is $200 but you can lodge as much as you want.

In return, you get a Mastercard or VISA credit card with a credit bounds up to the amount you deposit.

Wow!

What a great honor!

This is no break! Think about it. If a stranger gave you $200 to throw for him until Friday wouldn't you experience safe in granting them a $200 loan? I intend it's their ain money you've got. If they default, you've got the full amount to pay off the loan. It takes a twined head to take $200 from you, grant you $200 credit with your ain money plus charge you astronomical interest rates just to take the money from your manus and give it back to you.

That's insane!

Of course, to battle this insanity, the great and fantastic banks claim to assist hole your credit report. They state that if you keep payments in a right fashion, this information will be reported to the credit bureau.

Yea, right!

When Shell names the credit agency to check your credit for a gas credit card, your report shows 47 defaulted loans and a bankruptcy.

However, there is one company that you do payments to on-time. Big deal. Don't you believe the remainder of your bad credit will still be the crucial factor in Shell's concluding decision. You wager you bottom dollar!

Look at this: the bank do money from the interest of your deposit.

The bank also do money by charging you 18% to 22% interest for the right to utilize their Mastercard or VISA. Plus the bank is guaranteed their money because if you don't pay on time, they take the money out of the bank account you opened with them along with any interest you have got got accumulated.

Why would anyone with $200 to lodge desire a credit card with a $200 limit?

If you have $200 and desire to purchase an point for $200, travel out and purchase it. That way, you'll have it lock, stock and barrel. No interest, no payments, no hassle! Plus, you won't owe your psyche to the company shop sort-of speak.

Credit is ofcourse a fantastic thing if you utilize it intelligently.

I cognize people who charge $100 at the beginning of the calendar month and usage that $100 to do $300. It's free money for 30 days. Then, when the measure comes, they immediately pay the full balance and come up out smelling like a rose with $200 to the good.

Or how about the legendary direct marketing millionaire "Harv T. Eker", who used his credit card to purchase a "near-bankrupt" business for $2000. Within a year, he turned that business around into a multi-million dollar company.

Now that's intelligence!

On the other hand, credit is also needed in certain fortune for establishing clout. You can't name in a telephone order unless you can charge the purchase to your credit card. This holds you getting points you desire now. I think that's A bumer for some people out there with no credit cards.