Beware These 5 Sneaky Credit Card Company Tricks

Upset man with credit card
Photo by Krakenimages.com / Shutterstock.com

Credit card companies love to dangle juicy offers in front of you. You might be “preapproved” for a 0% interest credit card or a valuable sign-up bonus. Maybe the company wants to offer you that fancy “gold” or “platinum” card.

Unfortunately, the amazing benefits you see in the bold lettering aren’t always what they seem. The real deal is in the fine print.

To sort out credit card deals from duds, take a closer look before you apply. Keep these red flags in mind.

1. Rates that aren’t guaranteed

A low interest rate is one of the big draws of new credit cards. 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. You might also see asterisks and superscripts 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.

The best defense? Read the fine print, especially the “rates and disclosures” information. It’s not exciting, but it will reveal what is actually guaranteed. Banks are legally required to furnish this information in the easy-to-read format shown on the website of the federal Consumer Finance Protection Bureau.

And if you’re uncomfortable because you can’t tell what the ultimate rate will be, don’t apply.

2. Fool’s gold

“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 indicated prestige in the past — and there are still elite cards requiring exceptional income and expenditures — most precious-metals labeling is meaningless.

Solution? Choose a credit card by comparing the benefits that really matter, like low interest rates, low fees or rewards. We have a credit card page — complete with reviews and a search function — in our Solutions Center that can help you find the right card.

3. Hyped-up business credit cards

Offers for small-business credit cards might seem like a great way to track business expenses and develop a credit history for your company. But these cards seldom live up to the hype, and they offer fewer 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. The Credit Card Accountability, Responsibility and Disclosure (Credit CARD) Act of 2009 applies only to consumer cards, which means your business card can still be hit with fees and rate hikes that would be illegal for your personal plastic.

So, even if a particular business credit card has advantages — such as enabling you to track business expenses separately — you could be sacrificing consumer protections to get them.

4. Big bonuses with a catch

It’s easy to get drawn in by the sign-up bonuses offered on new cards. You might see an offer of $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, like $1,000 in purchases to get that $150, or $2,000 charged to earn 25,000 airline miles. While the details vary, completing these offers as stipulated may be difficult or even impossible, depending on your budget.

Some offers boast “up to 5% back” on your purchases, but that may be only at certain retailers, and not for every purchase you make. Some cash-back deals might be for a limited period after you open the account, and there might be a cap on how much you can earn.

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. If that’s a trap you feel likely to fall into, a rewards card may not be for you.

Shop rewards cards and all other cards before you commit. Again, check out our credit cards page to find additional choices.

5. Not-so-special offers

Credit card offers come crammed with language that makes you feel like you’re getting a special deal. Envelopes might be stamped with “Important” or “Confidential” to heighten the urgency. Once opened, you might be excited to find you’re “preapproved” for a new credit card.

Unfortunately, being “preapproved” doesn’t actually mean the new card is yours. In fact, it doesn’t really mean anything. You’ll still need to apply for the card and go through the whole approval process.

Be careful about choosing a card simply because it appears to be a special offer made just for you. It may just be another trick to reel you in.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
12 Easy Ways To Make Make Money Online Without Leaving Home
12 Easy Ways To Make Make Money Online Without Leaving Home

If you’re hanging around the house a lot these days — and who isn’t? — use your time to make some extra cash.

7 Ways to Shop at Costco Without a Membership
7 Ways to Shop at Costco Without a Membership

You don’t necessarily need to join to get in on the warehouse store’s savings.

30 Purchases That Will Start Saving You Money Immediately
30 Purchases That Will Start Saving You Money Immediately

Sometimes, you’ve got to spend to save. These canny deals are a good bet for savings.

19 Things You Should Never Buy at a Grocery Store
19 Things You Should Never Buy at a Grocery Store

These household necessities are overpriced at the grocery store. Get them cheaper at these places instead.

7 Common Online Shopping Mistakes That Will Cost You
7 Common Online Shopping Mistakes That Will Cost You

How many of these costly online shopping missteps are you making without realizing it?

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

20 Things That Are Actually Worth Stockpiling
20 Things That Are Actually Worth Stockpiling

You don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?
Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?

Understanding survivors benefits rules is the key to getting the most from your benefit.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

These Are the 10 Worst Cars for Depreciation
These Are the 10 Worst Cars for Depreciation

Two types of vehicles are especially likely to see steep plunges in value.

Do This With Your Mask Before Thanksgiving Dinner
Do This With Your Mask Before Thanksgiving Dinner

Before you sit down at the year’s biggest feast, make sure to properly care for your mask.

Never Buy These 10 Things With Your Credit Card
Never Buy These 10 Things With Your Credit Card

Credit cards offer many conveniences and protections, but sometimes it’s simply smarter to keep the plastic tucked away.

13 Amazon Purchases That We Are Loving Right Now
13 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

10 Things I Always Buy at Trader Joe’s
10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

8 Surprising Household Items You Can Sell for Fast Cash
8 Surprising Household Items You Can Sell for Fast Cash

Sometimes, the humblest household items are worth the most money.

Cut These 11 Expenses Now If You Hope to Retire Early
Cut These 11 Expenses Now If You Hope to Retire Early

Like the idea of financial independence? Part of the FIRE equation is cutting costs.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

There are easy high-paying majors available in the U.S. — and no bachelor’s degree is required. We’re here to help you find easy degrees that pay well.

5 Ways Social Security Will Change in 2021
5 Ways Social Security Will Change in 2021

These adjustments will affect both workers and retirees in the new year.

Stop Buying These 19 Things Online
Stop Buying These 19 Things Online

The internet has changed how we shop. But for some things, you’re still better off buying the old-fashioned way.

15 Products You Need — Even If You Didn’t Know It
15 Products You Need — Even If You Didn’t Know It

Discover some must-have products on Amazon that you didn’t even know you were missing.

7 Tips for Building an Emergency Food Supply
7 Tips for Building an Emergency Food Supply

A pandemic or natural disaster could leave you reliant on your existing emergency food supply. Is your pantry well-prepared for emergencies? Knowing what to stock up on for emergencies can be a difficult task and we’re here to help.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

8 Things You Should Buy at Restaurant Supply Stores
8 Things You Should Buy at Restaurant Supply Stores

You don’t have to be a chef or a restaurant owner to shop here.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.