One Money Design

We’ve all received credit card balance transfer offers in the mail.  I just received one the other day and it’s not unusual to see a new one arrive each week. 

I used to be on a mailing opt out list, but I guess I need to check into renewing it.

Anyway, isn’t it interesting how these offers are presented?  We get the offer in a plain envelope without any writing or indication as to who it’s from.   Inside is a nicely formatted brochure (checks conveniently attached) with all the benefits nicely organized to catch your eyes.

Usually, I tear the offers  into a hundred pieces and deposit them into a special file which is then given to our local trash service once a week.  However, for some reason I decided to open this particular offer.  Maybe it’s because I’m on vacation this week and have a little extra time.  And no, I don’t have a new credit card today!

Credit card offer content

What did I find inside?  Here’s a highlight of the benefits dancing before my eyes: 

Fewer bills and more convenience. 

I can use balance transfer checks to consolidate all my balances on this credit card so one payment will now go to this creditor.

Consolidate high interest credit cards  

Two options are presented to lower interest

• 0% APR on transferred balances until February 1, 2010 when I use certain checks.
• 1.99% APR on transferred balances until August 1, 2010 when I use certain checks.

Pay off your bills 

I can use the attached checks to pay off bills and loans and for making special purchases.

Deposit the checks into your bank account

Or, they give me a grand idea of just writing myself a check and depositing it into my checking account to make purchases as I see fit. 

Disclaimer

Sounds pretty good, huh?  Here’s what’s at the bottom of the page.  Okay, at least they printed this on the front of the page!

• The balance transfer fee is 3% of the amount of each balance.  Ouch, 3% on existing debt transferred to the creditor.
• After the promotional offer ends the standard APR for purchases will be 16.99% and for cash advances is 21.99%.  WOW! 
• If you default payment, put on your seat belt because the APR screams up to 29.99%.
• Oh by the way, there is an annual membership fee of $85.  You have to pay to play.

Doesn’t sound so good, does it?  The nice presentation was diminished with the disclaimer at the bottom of the page.

I post this article to bring more light to some of the offers people are receiving in the mail.  Sure, nothing new, but given some of the credit issues out there today, people might be more apt to consider these offers.

The intial gut reaction one might have is to open up the credit card and think the offer could aid in fixing one’s debt nightmares.  But not reading the disclaimer as well as not having spending under control could lead one deeper into debt.   If there has already been credit abuse in the situation, opening up another card can be like playing with fire! 

Alternatives to opening a credit card

There are a few other alternatives before opening up a new credit card account and rolling over oustanding balances.

• If your interest rates are grossly high, consider contacting your creditor and ask that they be lowered.  Don’t like the answer you get?  Call back and ask to speak with someone in authority?  Don’t like the answer you get?  Call back and ask to speak to someone in authority again.
• Consider the help of a credit counseling organization such as Consumer Credit Counseling Services.
• There are new options available today such as getting a loan from a friend.  You can read about Matt Jabs from Debt Free Adventure who recently had a positive experience with Lending Club.  I myself have not had any experience with this approach, but Matt seems happy with the results.

Can you think of other options?

Related Posts:

• Should You Cosign a Loan or a Credit Card?
• Cash, Credit, or Debit Purchases – What Works For You?
• No Minimum Credit or Debt Card Transactions