Credit Card Offers

The vast majority of credit card offers you receive are fair and ethical. But there are two things to look out for that some credit card companies have been known to pull on unwary customers. These tactics are perfectly legal, so your only recourse to preventing them is to be alert.

The old bait and switch. You apply for a great credit card that gives you tons of frequent-flier miles, hoping to put all of your shopping on it, and then head to the Bahamas in February. When and if you get that card, study the terms carefully. If you don't qualify for the great card, the credit card company can send you a completely different card with different terms--without telling you.

Cash advance fees and rates. Read the fine print on your statement and you'll see it's a very bad idea to take cash out on your credit card. Your card might have a really low rate for purchases, but the rate for cash advances is much higher. And there is no grace period--you start paying interest right away.

Aside from paying a high rate on the cash you take out, you're going to pay a fee, usually 2 percent to 4 percent of the amount advanced. And your payments will be applied to the lower-interest balance before they are applied to your cash advance. Don't get yourself into trouble with either of these two mistakes ... read the terms of your credit card offers carefully before you activate them.

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