We may live in a high-tech world where email rules, but credit card issuers are still sending out card offers the old-fashioned way. Let's take a look at some of the more deceptive terms you might see inside of -- and even on -- the envelopes you find in your mail box.
1: 0% APR
This is often accompanied by "Our best rate ever!" Well, one would think so since 0% is as low as it goes. The 0% introductory APR offers are often a good thing. But read the very tiny fine print, especially the part about how your 0% APR can immediately turn into a 29.99% penalty APR if you're late on a payment. Most of these 0% offers disappear in a cloud of dust if you don't make payments on time.
Many of the offers apply to purchases only so don't be fooled into thinking you can transfer your $5,000 balance from another card and pay no interest. And pay attention to the effective dates for the introductory rate. Generally, you'll see something like, "0% intro APR until May 2011." The CARD Act requires that these offers remain in effect for a minimum of 6 months, so at least you don't need to worry about bait-and-switch tactics with APRs.
2: Low APR
This one's often related to 0% introductory APR credit card offers. You'll probably be promised a low APR once your 0% introductory APR offer expires. What constitutes a low APR is obviously in the eye of the beholder. We've seen offers touting a "low" 18.99% APR once the intro period ends. In what world is that a low rate? A loan shark's world?
3: You've Been Pre-Selected!
Don't get too excited. This means you've been selected to receive an offer to apply for a credit card, not selected to receive the credit card. Typically, this happens when your credit score falls within the credit range the card targets. For example, if your credit rating is fair, you'll receive offers for cards that target consumers with fair credit.
4: Priority Notification
This is frequently found on the outside of the envelope. This proclamation might make you feel special, but most likely, millions of others are receiving the same offer on the same day. The idea is to make you feel like you're part of a club that gets first notice on exclusive deals. That doesn't mean it isn't a deal, of course. Just don't think you need to jump at this "exclusive" offer.
5: 0% Fraud Liability
If you report your card missing before it's used by a thief, you already have 0% fraud liability. You're protected under many federal laws. You're liable for up to $50 if your card is used before you report it. So if the card offer is advertising fraud liability protection, it's not as big a bonus as it sounds.
6: Credit Line Increases
This phrase gives the impression that you'll receive a higher credit line than what you currently possess. All this means is that you'll be considered for credit line increases during the life of your account. After that, with responsible credit behavior, you might see an increase in your credit limit. Well, that's how all cards work.
7: Helps Build Credit
If you pay off your balance every month or make your minimum payments on time, you'll build your credit. This is not a unique feature for a card. Now, if you're receiving offers for a secured credit card, you might see this language to indicate that the issuer reports consumers' credit information to the credit bureaus. This isn't practiced by all issuers of secured cards. So if you're looking for a secured card, that's important to know.
But unsecured cards, if used responsibly, all have the capacity to improve your credit. Don't be lulled into believing this offer is for a magic credit card that does something no other card can do.
8: Act Now!
Just in case the exclamation point doesn't get your attention, this phrase is often underlined for added emphasis. It's also often accompanied with personal compliments, such as "You've earned it!"
Well, even if you have, indeed, earned it, "Don't Act Now!" is the action that's needed on your part. This card offer may have an expiration date, but it's not going to disappear while you're reading the disclosure statements. Besides, you always want to research other credit card offers before you choose a card. Otherwise, how will you know if you've got the best deal?