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Credit Counseling - Gold Cards

"You are approved" "No-Credit check", "$8,000 credit line", "Guaranteed Approval"

You have seen these offers and probably wondered what they were all about. If you were wise you recognized this appeal as one that falls into the category of too good to be true and didn't loose your money getting involved with this scam. Put plainly, most Gold or Platinum card programs are high dollar come-ons that give you little in return but big balances or over priced merchandise. 

Often such 'gold' and 'platinum' credit-card offers are promoted through television or newspaper advertisements, direct mail, or telephone solicitations using automatic dialing machines and recorded messages. People who live in lower-income areas often are the target of these sales pitches.

Some of these 'gold or 'platinum' cards offer to improve your credit. They tell you that even with a previous bankruptcy or credit problems approval is a sure thing. According to the fine print the card requires a 'membership' fee of $50 to $150 dollars. This fee is often added to the balance of the card before you receive it. In some cases, the charged fee is billed as due prior to the mailing of the first statement. This adds late fees to the balance of the card and often constitutes the entire credit limit allowed. 

In many cases the $150 'membership' or 'application' fee is billed to the card along with a monthly activity fee, and a minimum interest fee. Lumped together, the total can reach $200 or more prior to even receiving the card in the mail. Then if the statement is listed as due prior to receiving it, a $30 to $50 late fee is added which puts the card over the $200 opening limit, which incurs and additional 'over-limit' fee. And of course interest is charged on the entire balance. It is easy to see that this is no bargain.

In addition to the expense of the card itself, which will have to be paid down before any purchase charges can be added, there is another big surprise; it is not a credit card, it is a catalog purchase card. Along with the card comes a catalog filled with overpriced merchandise. The only thing you can use the card on is the purchase of merchandise from the catalog. The card is not issued by a bank, can only be used for catalog purchases, and is not reported to the credit bureaus. The whole premise of under which the cards are promoted is false.

Some people want what they believe to be a credit card so they can make emergency purchases; but they can't.

Some want to use the card to improve or establish their credit; but it doesn't.

Others believe subscription to this card makes them eligible for another Visa or Mastercard; it does not.

Not only does the card not meet expectations, but puts the consumer in debt without returning any benefit. As part of the membership package, along with the card and catalog, often there will be fliers, brochures, and applications for numerous credit cards, which a person could collect on their own.

Note that there are a number of tell-tale signs signaling possible problems with an offer. 

Beware of any company that charges upfront fees, without saying there may be additional costs. 
Some card promoters charge $50 or more for their card. Once this fee is collected, and possibly after the card arrives, you will have to pay another fee, up to $30, for the merchandise catalog. But since the catalog is the only place you can use the card and you have already paid for the card, you can either loose the original fee or be sucked into investing even more in the proposition.

Asking you to call '900' or '976' telephone exchanges.
Ads that ask you to call these exchanges for more information expect you to pay for phone calls with these prefixes, and sometimes these fees are very high, whether you get the card or not.

Promises to get you 'better credit. 
The catalog card can not improve your credit. If you have a damaged credit history, the only card that you will qualify for is a secured credit. A secured card requires that you open a savings account as security for your line of credit. The credit line is a percentage of the deposit, from 50% to 100%.

Don't let your emotions get the better of you. We all have expenses, and we all come up against a difficult financial situation from time to time. Adding to your debt is not the answer. In desperation for more credit or optimistically hoping the offer is legitimate sets you up for being taken advantage of. Protect yourself.

If it is too good to be true, it probably is. 
There is no quick or easy way to overcome a poor credit rating. Only time and disciplined spending habits will restore your credit worthiness. No reputable financial institution will grant easy credit to a poor credit risk. Before spending on a supposedly 'quick fix', look at all of the information objectively.

Do your own investigation before sending money 
Contact the consumer protection agency, or the state Attorney General's office to inquire about the company's record of consumer complaints. 
If the card is supposed to be valid at certain chains or establishments, verify it with the stores. 
If the marketer tells you that this will improve your credit, call the credit bureaus to confirm that the card promoter is a member. Unless 'gold' or 'platinum' card merchants are subscribers to credit bureaus, they won't be able to report information about your credit experience. 
Don't call the '900' or '976' numbers. They cost money and do not guarantee receipt of the card.

There are a lot of scams and a lot of scam artists out there trying to take advantage or people who are desperate and cash strapped. Don't let these people cheat you out of what little money you have left. The old phrase, "Caveat emptor", or "Buyer beware" certainly applies here. 

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