When in the market for a credit card, you need to do your homework before you even consider submitting an application for any type of offer. There are many different types of credit cards, all of which have different reward programs, rates and terms. This makes it very difficult to decide what card is best for your needs. In addition, there are card issuers that look to take advantage of consumers that are not familiar with credit cards or how they work. If you fall prey to one of these companies, you can be taken for quite a ride financially. Featured below is information detailing some of the more common scams companies use. If you can spot these tricks during your research, you can steer clear from the offending card offer/company!

Credit cards that charge fees in advance
It is very common for credit card companies to offer cards with extremely desirable terms with low interest rates and generous limits. They boast that this offer is available for people of all credit types, including bad credit. The only requirement for approval is that the applicant has to pay a small fee in advance. The creditor claims that this fee is either required to process your paperwork or is needed in order to get you pre-approved. Unfortunately, once the fee is paid, the credit card company will disappear with your money and you will never hear or see from them again.

Never pay any fees upfront in order to get approved for a credit card, period.

Debt suspension offers
If you can not pay your bill because of an unexpected illness or event, you do not have to pay your bill. This is called 'debt suspension' and is offered by every single major credit card company. The intent is for you to resolve your issues and/or get your finances back in order before you are required to proceed with your regularly scheduled payments. During downtime, no interest will be applied to your card. You can even continue using your card to make purchases. Does this sound like an excellent deal? That is because it is! The banks are making this offer themselves, and don't have to utilize an insurance company. As a result, it is usually offered to the consumer for free. The scam takes place when a company pretending to be an insurance issuer makes the same type of offer to card holders that are not aware that their card issuer is already protecting them. Even if the consumer does buy the additional debt suspension offer from the scamming company, it is very unlikely that they will ever be able to even submit a claim, let alone collect from one.

Credit protection
In the event that your credit card is stolen or lost and used without your consent, you will not be responsible for the charges that are made. In fact, there is a federal law that limits your liability in the event of fraudulent charges to $50. However, there are scamming companies that sell credit protection programs to consumers that do not know that they are already protected. Similarly to the fake 'debt suspension' offers, even if this credit protection offer is purchased, the likelihood of collecting from a claim is most likely going to be zero!

In conclusion...
It is very important that you know what credit card companies offer and what your rights as a consumer are. This will help you avoid becoming a victim of one of the thousands of companies that prey on consumers that lack credit card knowledge.

Jacob Joseph is a financial expert for

Web Design and Optimization By Top Ten Marketing
Copyright 2005-2006 Twenty-First Century Associates

All Rights Reserved.