Credit Card Offers : The Good, the Bad, and the Ugly

We've all seen them, sprouting in our mailboxes like so many mushrooms under a half-decayed log in the forest: Credit card offers. Good! Bad! Ugly! Pre-approved! Platinum! Act now! Sometimes they're even worth investigating; despite two prior bankruptcies, a job that got Obamified in 2009, and one home foreclosure, I'm still not against credit cards per se.

But ya gotta be careful there, Pilgrim!

There are undoubtedly gradations of gray along the decency scale when it comes to these things, but the ones that hit our house all seem to fit one of two categories. That is, they're either pretty good (as long as you manage your purchases and payments and avoid taking cash advances)...or they're incredibly bad and ugly.

For comparison purposes, let's call the good one "A" and the bad/ugly version "F" (as if they were being graded). We won't name the companies--not because the bad/ugly one might sue me, since truth will keep me free, but because you might see one from the "A" outfit and think it's fine without reading the fine print. That could be disastrous; today's bargain can be tomorrow's debt trap.

We'd been ignoring credit card offers like the blamestream media ignores Sarah Palin's qualifications to serve as President. The final two in our arsenal had been cancelled about three years ago when they decided to jack up the interest rates dramatically. When we told 'em , Oh no you don't, they replied, Card cancelled at customer's request, and that was that.

Company A had been sending us card offers regularly for more than a year when I changed my mind. Not because their offer got better, but because we were (are) facing a specific financial situation where a bit of short term credit seems just the ticket. I have some mineral rights in North Dakota, inherited from my Dad, that became suddenly valuable in 2009. With the deposit money for lease of those rights, I built our house--but ran out of that cash entirely in September (2010). We're now subsisting on my Social Security dole plus a smidgen from Google Adsense.

That would actually be the worst time to begin using a new credit card--living on a mostly fixed income--except for one thing: It looks like the energy company is going to start drilling on the acreage covered by my lease within the next month or two. Which means royalties should begin heading our way around, say, midsummer (give or take). Which further means that a slowly rising balance on the card between now and July shouldn't be a problem.

We hope. It's always a bit risky to "live on the come", as they say.

So I became, once again, open to acquiring a credit card--if the terms were right. With Company A, they were. Here are the clues:

COMPANY A

1. We'd done business with this outfit before. In fact, we've had one of their cards for approximately 20 out of the past 26 years. If we know any credit card company, it's this one. They've never "lost" payments in order to hit us with late charges or done anything else underhanded...unlike some!

2. The opening "teaser" rate of 0% on purchases continues for nearly a year.

3. Even after that, the grace period which can leave interest at 0% more or less permanently is 25 days from the statement date. (Standard fare.)

4. No annual fee. None. Nada. Zilch.

5. The possible credit line could have run as high as $3,000. With a recent home foreclosure and one abortive collection on record, we didn't expect that. (It took us 3 months to pay off our final power bill in Colorado--and you wonder why we live off grid these days?) But if they'd give us $1,000 for backup, that would be cool.

The rest of the terms are pretty standard, but with those four "deal killer" items showing up on the proper side of the ledger, we were good to go. We've had our black Platinum card with the bald eagle logo for a few weeks now, and it feels good to know there's a bit of in-wallet reinforcement. $2,000 worth of reinforcement; apparently their underwriters understand the difference between those who stiff creditors because of unavoidable circumstances and conditions...and those who do so from lack of character.

Definitely the Good!

Now, for the Bad and the Ugly....

There's little doubt that Company A does sell our information to other, less reputable operations. We don't much care about that, but the fact of it became rather obvious when we began getting deluged with offers from Company F within days after appying for Company A's Platinum card.

Why obvious? Oh, little things. The fact that they always send a "fake card" with each solicitation which, exactly like the Company A plastic now in my billfold, is Platinum, black, and sports an eagle logo. Not just any eagle, either, but the exact same fierce-eyed baldy.

Really, now.

Company F's card is issued by a different bank in a different state, but for all we know the one could be owned by the other.

Never thought of that.

Anyway, while the surface--the really, really surface part of the surface--looks the same, the terms could not be more different. Check this out:

COMPANY F

1. I do vaguely recall having had a card from this bank in the past. Can't pin it down, but the memory "feels" a tad bitter. Something about screaming over the phone a lot and/or writing nasty poison pen letters. It pays to pay attention to things like that.

2. It wasn't easy finding the name of the bank. At first it seemed like maybe the offer was a total scam designed only to flush out your personal data. Another red flag.

3. There is no "teaser" rate. With this one, they're socking you 1/100 of 1 percent less than 20% interest from the get-go, so help me Usury. (They do allow the "standard" 25 day grace period to pay your bill each cycle; I'm thinking that's probably a legal requirement.)

4. Annual fee to own this gem: $59.

5. Maximum credit limit (if you can find it listed in the Solicitation Disclosures--in one case it just wasn't there): $300. No, not $3,000. Three hundred. Max.

6. Making a late payment (and you can bet you'd "mysteriously" be late no matter when you mailed the money) puts you into penalty territory--where the interest rate is suddenly 30% (minus 1/100 of 1 percent).

7. Once on penalty turf, you can't get off until you make six straight on-time payments (and guess how hard that will turn out to be, eh?).

That one alone makes it sound almost safer to borrow from your local Freddy the Fish or other knee-breaking loan shark. The Fish would certainly be a more honest option.

Nor is Company F done yet.

8. Late payment fee (in addition to upping the interest rate as noted above): Up to $35.

9. Over the Credit Limit: Up to $25

10. Returned payment: Up to $25

11. Balance Transfer interest rate: 19.99%. (We've had cards with 0% for balance transfers, though admittedly not since Obama took office. Maybe if Sarah Palin decides to run, we can get to back to that in 2013 or so...?)

12. Balance Transfer fee (in addition to interest): $5 or 5% of the amount of transfer, whichever is greater.

13. Cash Advance fee (in addition to interest): $5

14. Foreign Transaction: 3% of each transaction in U.S. dollars. (Don't leave for vacation in Holland with it!)

15. Payment by Phone fee: Disclosed at the time such payment is requested.The staff who must process said payment apparently get really ticked at having to talk to you, ya know. So, what, they've got a sliding scale from $10 per Suckup Sheeple to $50 per Wimpy Whiner? Something like that? Maybe a Double Bonus of $100 per Angry American?

16. Stop payment fee: $29.

17. Research fee: Disclosed at time document copies are requested.

That's about it--oh, except for two things: If you use the Comany A card to buy anything that has a warranty of at least a year on the product, Company A will warrant said product for one additional year. Which is pretty cool. Company A also features "$0 Fraud Liability" so that if somebody cons you, and you used your card to pay the con, and you're willing to admit your gullibility to the Company, Company A will take the hit and go after the perpetrator. They do have more resources to catch and prosecute criminals than you do, obviously...although Nigerian princes might be a bit tough, even for them.

Also obviously, Company F provides neither of those benefits.

Naturally, this hub is unlikely to help a whole lot of people. It could...except that those likely to read it are the types who already have two brain cells to rub together and wouldn't get sucked in by Company F in the first place.

Hey, we tried.