Gold and Platinum Credit Card Scams

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 that are accepted most anywhere, some ‘gold’ or ‘platinum’ cards permit you to buy merchandise only from specialized catalogs. Marketers of these credit cards often promise that if you participate 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, improve your credit, and other financial benefits.

These ‘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 pitches. Beware of ‘gold’ and ‘platinum’ card offers that charge upfront fees, use 900 or 976 area codes, misrepresent prices and payments for merchandise, and promise to easily get you better credit.

Charge upfront fees

Some charge $50 or more for the card and may charge an additional $30 or more for the merchandise catalogs. These catalogs are the only places you can use the card.

Use ‘900’ or ‘976’ telephone exchanges

Ads for these cards list ‘900’ or ‘976’ exchanges to call for more information. You have to pay for the calls, which can be high.

Misrepresent prices and payments for merchandise

You can’t charge the total amount when you buy merchandise from the catalogs. Instead, you often pay a cash deposit on each item you charge, which is usually the amount the company paid for the product. Only after you pay the deposit, can you charge the balance.

Promise to easily get you “better credit”

They often claim it’s easy to get major credit cards after using their cards for a few months. The only cards you can get through them are secured. A secured card requires you to open and maintain a savings account as security for your credit limit.  The amount can be lower than most credit cards such as up to $600.

How To Protect Yourself

Think twice about any offer to get “easy credit.” There is no easy solution to improve your credit. It takes time, which includes paying your bills on time and paying more than the minimum.

Investigate an offer before enrolling and 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.

Check out the claim that the card can be used at certain retailers.

Verify the issuing bank, which is the bank that issues the VISA or MasterCard.

Be cautious about calling ‘900’ or ‘976’ telephone numbers. Legitimate credit card offers include a toll free number.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

Categorised in: Credit Cards, Credit Monitoring, Credit Report, Money & Identity

This post was written by John Ulzheimer