How to Protect Yourself: "Gold" Cards
Source: The Florida Attorney General's Office
If you are looking for credit, be wary of "gold" or "platinum" card offers promising to get you credit cards or improve your credit rating. While they may sound like regular credit cards, some "gold" and "platinum" cards only permit you to buy merchandise from specialized catalogues. Marketers of these cards often promise that by participating in their programs, you will be able to get major credit cards (such as unsecured Visa or MasterCard), lines of credit from national specialty and department stores, better credit reports, and other financial benefits. Rarely can you improve your credit rating or obtain major credit cards by purchasing these specialty "gold" or "platinum" credit cards. At best, you might obtain a secured major credit card, which requires you to make a substantial security deposit with a bank or other financial institution.
These offers are usually promoted through television or newspaper advertisements, direct mail, or telephone solicitations using automatic dialing machines and recorded messages. People residing in lower-income areas are often the target of these offers.
Tips For Consumers
- Be wary of "gold" and "platinum" card promotions that:
- Charge upfront fees without saying there may be additional costs. Find out the total cost before ordering this type of card. The cost could range from $50 to $100 or more.
- Use '900' or '976' telephone exchanges. Advertisements may encourage you to call telephone numbers with '900' or '976' exchanges for information about the cards. Remember: you pay for phone calls to these exchanges - even if you never get the card. The cost of the call could be $50 or more.
- Misrepresent prices and payments for merchandise. When ordering from a "gold" or "platinum" card catalogue, you are typically not allowed to charge the total purchase price on your card. Instead, you are required to pay a cash deposit on each item, and then you are permitted to charge the balance. Also, prices in these specialty catalogues are often much higher than most discount stores.
- Promise to get you "better credit" easily. In fact, the only Visa or MasterCard these marketers can get for you are secured. However, secured credit cards are available through banks, finance companies, and other credit card companies. You do not need to buy a "gold" or "platinum" card first. Also, because these marketers do not report to credit bureaus, using their card will not improve your credit rating.
How to Protect Yourself:
To avoid being caught in a "gold" or "platinum" card scam, take these precautions:
- Think twice about any offer to get "easy credit."
- Be skeptical of any promises to erase bad credit or to secure major credit cards regardless of past credit problems.
- Be cautious about calling '900' or '976' telephone numbers.
Before agreeing to any offer, you may want to contact your local Better Business Bureau or your local office for Florida's Attorney General to see if any complaints or legal actions have been filed against a particular promoter of "gold" or "platinum" cards.
To file a complaint:
Contact your local Better Business Bureau. You also may file a complaint with the Federal Trade Commission by writing to: Correspondence Branch, Federal Trade Commission, Washington, DC 20580. You can contact the National Fraud Information Center at 1- 800-876-7060. If the company is out-of-state, you may wish to call the appropriate agencies and authorities in the state where the company maintains its headquarters.
If you want more information on your credit rights, '900' telephone numbers, or to obtain a copy of BestSellers - a complete listing of all consumer and business education publications from the Federal Trade Commission contact: Public Reference, Federal Trade Commission, Washington, DC 20580, (202) 326-2222, TDD (202) 326-2502.