posted
Going through my credit card offers this morning before shredding them I came across quite the offer for a new Visa from Universal Savings Bank! If I sign up for their credit card, they'll give me a free Dell computer. ($550 value.)
Over 30,000 card holders have already taken advantage of this computer reward offer.
"You won't need a computer to figure out this is a great deal, but we'll give you one as a reward anyway."
What do I have to do to get this great reward? I have to transfer $5,000 of qualifying balances to my new Upfront Rewards Visa.
Then I can just pay it off, right?
Nope, then all I have to do is maintain a balance of $3,500 for at least 18 months.
What if I don't have $5,000 in credit card balances and I want to take advantage of this offer anyway?
No problem! I can request up to $2,500 in cash advances to make up the difference! There are no fees for these initial transactions. (Emphasis theirs.)
What if my balance goes below $3,500 in the first 18 months?
My account will be assesed a one-time $500 fee.
10.99% variable APR on the balance transfer, 19.99% on cash advances, but only 10.99% on the special account opening advance.
All because I've earned this special offer with my good credit! Quantities are limited, act today.
I am appalled that over 30,000 people are really this stupid/have no reading comprehension. In what world is it a good idea to take out a $2,500 loan at 10.99% APR to get a free $550 computer? Not to mention paying 18 month of interest on a minimum of $3,500. . . even buying the computer on a crap-ass low monthly installment plan would make more sense. I'm too lazy to run the amortization and find out what this wonderful deal would actually cost, but I just had to share what my excellent use of credit has earned me, so you can all be jealous. You are jealous, aren't you?
What's the most ridiculous offer you've ever gotten to "save you money?"
Posts: 7954 | Registered: Mar 2004
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But think of the economy! If people could actually do arithmetic, they wouldn't run balances on their credit cards; therefore they would have to consume less; therefore the economy would cool down and collapse! You must take advantage of this splendid offer, it is nothing less than your patriotic duty! Consume today, it's the American Way!
Posts: 10645 | Registered: Jul 2004
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Just after we closed on our house we got an offer which I initially thought was from our mortgage company. The letter pointed out how hard it is to budget for monthly house payments when most people are paid every-other Friday and payday doesn’t always line up with the beginning of the month. The plan showed how you could save interest payments and pay your loan off sooner by moving to a every-other week-payment plan.
My first thought was that it was very nice of the bank to offer an every-other week payment plan, although it didn’t apply to us since Bob and I both get paid twice a month.
Then I read the rest of the letter. It was NOT from our bank but from “a non-affiliated company” that “works with” our bank (whatever that means. And they are selling a “service” – you pay half of your monthly mortgage to them every two weeks. They hold it and make your payment for you on the first of the month. You do save interest and pay off your loan sooner because you’re paying in extra (a monthly payment every four weeks), but the “non-affiliated company” takes a fee out of that extra money. And since the bank allows extra payments on the principal at any time, with NO fee, this “service” is worth absolutely nothing. It would add three years worth of mortgage payments to what you’d be paying if you paid the amount directly to the bank.
This month the same company sent us a very official looking letter with the heading “overpayment of interest.” I was (momentarily) worried/annoyed that the bank didn’t apply our extra payment to the principal, but then realized it was the “non-affiliated” again letting us know that we’d pay less interest if we used their service. If we get another one, I’m thinking of contacting the state attorney general’s office. They’ve been cracking down on these sort of not-quite-fraud advertising practices.
Posts: 9866 | Registered: Apr 2002
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Yeah, I've gotten both the "free" computer offer and the "make an extra mortgage payment for a fee" "service" offer too. I think 20-30 percent of my trash output is junk mail.
Posts: 6394 | Registered: Dec 1999
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Everyone should go here! Yes, it is real, not fishing, see. Make a lot of those "spectacular offers" go away!
When we purchased our first house last year, I was appalled at the amount of junk pretending to be from our mortgage company that arrived in the mail. I wish that there were legislation to prevent financial institutions from selling your personal information.
The "make a payment every other week instead of once a month" thing can be a good option. If you're interested in it, don't go through some hideous service, call your mortgage company and ask them if they offer it. Many of them do.
Posts: 5879 | Registered: Apr 2001
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posted
Ooo, thanks ludosti! I opted out of junk mail/cold calls a while back by sending two snail mail letters, but I haven't been able to find the addresses since then. I thought I had read about it in a Motley Fool book, but I looked through my book with no luck. I've been searching for the opt-out site/address for a while. I still don't get much junk mail, but it's starting to increase, so I wanted to opt out again (it was only supposed to be good for two years, anyway).
Seriously, I recommend everyone does it, because it is SO SO NICE not to deal with junk mail.
And oh, that site has a link to the telephone opt-out! Yay! *gives ludosti a gold star*
Posts: 1805 | Registered: Jun 1999
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Everyone should do both - opt out of regular junk mail (like xnera did) and opt out of pre-approved credit offers (my link). I would bet that doing both will almost completely eliminate your junk mail. Posts: 5879 | Registered: Apr 2001
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i got the thing where I could get 30 millions dollars for investing in some oil company, I blocked them after sending a warm and fuzzy reply. Posts: 1567 | Registered: Oct 2004
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I don't remember what kinds of shady credit card offers I've gotten. I typically shred them without even looking to see what kind of amazing offer it is.
Posts: 586 | Registered: Jan 2003
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I hate financing plans in general. I work in customer service at a bed retailer, I get to work with people who did a "1 year deferred interest" financing deal and didn't realize what happens at the end of that year if they're not paid in full. Mostly I just have to refer them to the financing company, since that's seperate. But those plans are far from the good deal they sound like at first.
When I was looking at big TVs recently I had a fun conversation with a salesman trying to sell me on flatscreens. I was just looking at them to compare, I don't think thinness is worth the extra cost. When I said a couldn't really afford $2400 for a TV (or more to the point, wouldn't pay that much for a TV) he said "Well, with the payment plan it's only $68 a month! You can afford that, right?" Took a quick look at the sign (48 months!), did the math in my head, and determined that no, I couldn't afford $3200 for that TV either.
posted
To be fair to some of those customers, though, Eni, the sales people in the furniture stores are typically NOT clear to the customers about that whole procedure. Sure you get a flyer with the details, but it's written up in lawyer-speak which is often hard enough to translate when you work in a law firm!
I got caught up in one of those early on, and fortunately it was for something relatively small, but oh did it hurt when I got that first bill after the year ended. Now I know to make payments all along if I ever let myself get suckered into a "make no payments" kind of offer.
Posts: 4515 | Registered: Jul 2004
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I just don't spend money I don't have, more or less. Seems simpler that way, though I realize I'll have to make a huge exception for a mortgage some day.
Posts: 10886 | Registered: Feb 2000
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If that sounded like I was blaming the customers for not understanding, that's not what I meant. I blame the financing company, mostly. People should say "No payments, what's the catch?" too, but when it seems like it's a promotion to sell more beds as opposed to a hook for charging ridiculous interest rates then I can understand stowing your cynicism.
But it's a pain to take calls or emails from the people hooked into it because there's absolutely nothing that we can do for them 99% of the time. The finance companies are seperate, so I couldn't waive that interest if I tried.
posted
I sort out my finances on a monthly basis, so there are times (if I happen to make a big purchase right before getting paid) that I owe more than I have. Generally speaking, though, I refrain from that.
Posts: 10886 | Registered: Feb 2000
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That's a really good philosophy twinky. I am the same way. More people need to be like us!
I am very proud of the fact that the only debt my husband and I have is our house. We own both of our cars outright. We have no credit card. It made it pretty funny when we were trying to refinance (either you don't have enough debt or you have too much, there is no middle ground apparantly), but it all worked out in the end. Unfortunately, we need to get another car this fall and will not have enough cash to buy what we are planning to get outright, but we can make a hefty down payment and won't need to pay a million dollars a month forever before it's ours.
Posts: 5879 | Registered: Apr 2001
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I haven't had any credit cards for years now and I think it's absolutely the best way to go. I get the same convenience with a debit card but I can't spend money I don't have because the debit comes straight from the bank account.
Credit cards are evil tools of Satan, I'm convinced.
dkw - one thing about the mortgage every two weeks, most mortgage companies will switch you to a biweekly plan for free. We're about to switch to it ourselves now that Wes has a regular paycheck instead of self-employment income.
Posts: 14428 | Registered: Aug 2001
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I think credit cards are useful, if used properly.
My mom's a finacial aid officer, so she made sure I knew all about the *potential* evils of credit cards before heading off to college. I currently have two cards in my name - a Visa and a Discover. I started out with a different Visa and a Mastercard, but within a year I was able to move up to cards with better rates and perks. I pay off everything I charge at the end of the month, which is really the key to not letting credit cards overwhelm you.
This way I'm building a good credit rating in case I ever need to get a loan for a car or a house. It's a lot easier to get a credit card while in college than once you graduate, which is why I suggest every student get one or two - as long as they understand the system, and are mature enough to not going on shopping sprees.
If you're working building up a good credit rating, by the way, don't close down an account if you're switching cards. Cut up the card and don't use the numbers online, but keep the account open, as it'll keep adding "good points" to your rating.
Posts: 2409 | Registered: Sep 2003
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I have no idea about money. I need someone from here as my financer when I turn 18. Someone. Please?
Posts: 2978 | Registered: Oct 2004
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There are a lot of good books out there that explain finances pretty well. I've always liked the "Idiot's Guide" or "Dummy's Guide" series, because they don't assume that you already know the basics.
I don't much about how banking and finances work in other countries...
Posts: 2409 | Registered: Sep 2003
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quote:If you're working building up a good credit rating, by the way, don't close down an account if you're switching cards. Cut up the card and don't use the numbers online, but keep the account open, as it'll keep adding "good points" to your rating.
This isn't necessarily the case. Having too many open accounts (even if they are inactive) can be detrimental when being considered for a loan. It has to do with your debt to income ratio. When applying for a loan, they may figure into your "debt" (aside from your actual debt) all your open accounts (ie. seeing how your ratio would be affected if you were to max out all your cards). So, having a ton of open accounts raises your possible debt and, if they are not active, does nothing to improve your credit score.
Posts: 5879 | Registered: Apr 2001
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ludosti - you're right, it isn't always the case. It seems to be a balancing act, from what I understand of credit score. Here's a good pdf that explains exactly what affects the credit score: myFico
One thing I noticed was that you can improve your credit rating by having a few credit cards that are still occasionally being used. Guess I'll charge something to the old Visa every now and then.
Posts: 2409 | Registered: Sep 2003
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Check out Michelle Singletary's columns on the washingtonpost.com for some good financial advice.
The columns aren't a comprehensive huide - each deals with a particular issue. But her overall financial philosophy is very healthy.
My favorite slogan of hers: "If it's on your ass, it's not an asset." It's designed to counter the thought that high-end purchases such as clothing are not an investment. It might be financially sound to buy a more expensive suit that will last longer, but don't think of it as an investment to do so.
Posts: 26071 | Registered: Oct 2003
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This just points out how many people in America are in debt. For some it may be a good deal. Because they already have payments to make at the same interest rate. I wouldn't know, I'm never in the red for more than $300 at a time. This is only recently because of school.
Posts: 1132 | Registered: Jul 2002
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*sigh* I have far too much debt, from student loans. Nowhere near some people, but far too much.
I'm applying for a number of scholarships, but there are extremely few specific to my area, and the more general ones are particularly competitive, and I don't qualify for any of the minority/ethnicity/culturally focused ones.
Posts: 15770 | Registered: Dec 2001
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quote:But think of the economy! If people could actually do arithmetic, they wouldn't run balances on their credit cards; therefore they would have to consume less; therefore the economy would cool down and collapse! You must take advantage of this splendid offer, it is nothing less than your patriotic duty! Consume today, it's the American Way!
Every once in a while, I really, really agree with KoM.
Posts: 67 | Registered: Aug 2005
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We also have no debt except our house. When we bought our house, we had to get letters of credit from all our utiltiy companies, etc. It made it a bit harder, but I know for us a credit card would be the road to ruin.
Posts: 2711 | Registered: Mar 2004
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In our case, Christy and I find credit cards more convenient and fairly thrifty, as we only use cards which give us cash back -- and since we pay off the balances every month, they're essentially like more sensible debit cards.
Posts: 37449 | Registered: May 1999
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