KNOXVILLE (WATE) – Credit card companies love to dangle juicy offers in front of you, but how do you sort out the good deals from the duds?
Have you ever been sent a notice from a credit card company that you are “pre-approved” for zero-percent interest or a valuable sign-up bonus? Maybe they want to offer you that fancy “gold” or “platinum” card. Unfortunately, offers that sound too good to be true probably are. And sometimes the amazing benefits in the bold lettering aren’t always what you get once you understand the fine print.
To sort out the credit card deals from the duds let’s take a closer look before you apply. A low interest rate is one of the big draws of new credit card, but you might not notice the subtle caveats to the special rate. Some offers will have “as low as” printed in small letters in front of the APR, or you might also see asterisks that refer you to the fine print, where the text explains the best interest rate is only available to applicants with the best credit.
In other words, the rate they’re using to lure you in isn’t necessarily the one you’ll get.
“Gold cards” have been around for decades. Credit card companies also have added silver, platinum and even palladium to the list of precious metals used in card names. While such cards may have been prestigious in the past — and there are still elite cards requiring exceptional income — most precious-metals labeling is meaningless. Choose a credit card by comparing the benefits that really matter, like low interest rates, low fees or rewards.
Offers for small-business credit cards might seem like a great way to track business expenses and develop a credit history, but these cards seldom live up to the hype, and they offer fewer consumer protections than consumer cards. With most small-business cards, it’s your personal credit on the line, not that of your business. So using the card does not create or develop a credit file for your business.
In addition, small-business cards lack important protections that consumer cards have, which means your business card can still be hit with fees and rate hikes that would be illegal for your personal plastic.
It’s easy to get drawn in by the sign-up bonuses offered on new cards.
Some cards offer $150 back or 25,000 airline miles just for opening an account, but there’s often a catch. In many cases, you’ll need to ring up a certain amount on your card within a specified time period. While the details vary, completing the offers as stipulated may be difficult or even impossible, depending on your budget. So, when it comes to rewards cards, understand what it takes to get the advertised perk. Rewards exist to make people spend – and borrow – more than they otherwise would.