If you're looking for credit, be wary of some 'gold' or 'platinum' card
offers promising to get you credit cards or improve your credit rating.
While sounding like general-purpose credit cards, some 'gold' or
'platinum' cards permit you to buy merchandise only from specialized
catalogues. Marketers of these credit cards often promise that by
participating in their credit programs, you will be able to get major
credit cards (such as an unsecured Visa or MasterCard), lines of credit
from national specialty and department stores, better credit reports, and
other financial benefits.
Rarely, however, can you improve your credit rating or get major credit
cards by buying 'gold' or 'platinum' credit cards. Often the only major
credit card you might get is a secured credit card that requires a
substantial security deposit with a bank. In addition, many of these
credit-card offerors do not report to credit bureaus as they promise, and
their cards seldom help secure lines of credit with other creditors.
Such 'gold' and 'platinum' credit-card offers usually are promoted
through television or newspaper advertisements, direct mail, or telephone
solicitations using automatic dialing machines and recorded messages.
People who live in lower-income areas often are the target of these sales
Watch Out For...
wary of 'gold' and 'platinum' card promotions that:
Charge upfront fees, without saying there may be additional
Some 'gold' or 'platinum' card promoters charge $50 or more for their
cards. Only after you agree to pay this fee are you told there's an
additional fee, sometimes $30 or more, to get the merchandise
catalogues. Yet, these catalogues are the only places you can use the
Use '900' or '976' telephone exchanges.
Ads for ' gold' and 'platinum' cards may urge you to call numbers
with '900' or '976' exchanges for more information. You pay for phone
calls with these prefixes -- even if you never get the 'gold' or
'platinum' card. The cost for these calls can be high.
Misrepresent prices and payments for merchandise.
You're not allowed to charge the total amount when you buy
merchandise from 'gold' or 'platinum' card catalogues. Instead, you
often must pay a cash deposit on each item you charge -- an amount
usually equal to what the company paid for the product. Only after you
pay your deposit can you charge the balance. Also, catalogue prices can
be much higher than discount store prices.
Promise to easily get you "better credit."
Marketers of 'gold' and 'platinum' cards often claim its easy to get
major credit cards after using their cards for a few months. In fact,
the only major cards you usually can get through these marketers are
secured. A secured card requires you to open and maintain a savings
account as security for your line of credit. The required deposit may
range from a few hundred to several thousand dollars. Your credit line
is a percentage of the deposit, typically 50 to 100 percent.
How To Protect Yourself
Follow these precautions to avoid becoming a victim of 'gold'
and 'platinum' card scams:
Think twice about any offer to get "easy credit."
Be skeptical of promises to erase bad credit or to secure major
credit cards regardless of your past credit problems. There are no
"easy" solutions to a poor credit rating that's based on accurate
information. Only time and good credit habits will restore your credit
Investigate an offer before enrolling.
Contact your local Better Business Bureau, consumer protection
agency, or state Attorney General's office to see if any complaints have
been filed against a particular promoter of 'gold' or 'platinum' cards.
If a marketer promises that a card is accepted at certain retail
chains, verify it with the stores.
If a marketer assures you that reliable information about you will be
reported to credit bureaus, call the bureaus to confirm that the merchant
is a member. Unless 'gold' or 'platinum' card merchants are subscribers to
credit bureaus, they won't be able to report information about your credit
Be cautious about calling '900' or '976' telephone
Calls to numbers with '900' or '976' prefixes cost money. Don't
confuse these exchanges with toll-free '800' numbers. If you dial a
pay-per-call number mistakenly, contact your local phone company
immediately. They may be able to remove the charge from your bill.