I have a credit card system setup for myself that really works, for me. I have four credit cards and every week I pay the minimum payment, so every month I end up paying at least four times the minimum payment. I have never been late, never gone over my limit and never bought anything I couldn’t easily pay off. I’m working on building up some nice credit for when, someday, I graduate and want to buy a house with my new fabulous job.
Last week I got an interesting credit card application in the mail from Peach Direct. They give you a $2000 credit limit right off the bat with limit increases as you pay your minimum payment of $15-45/month.
What bothers me so much about this credit card application, more than all the others I have gotten, was the insert that came with it.
Yes, they actually give you things to buy WITH the application
They give you the option to buy a 46″ HDTV, Prada sun glasses, a computer… all before you even get the credit card. You essentially rack up charges without even touching the card. What a genius/evil idea. People say, I want a new HDTV (I certainly do) and get this application and think, yeah, $45 a month, I can totally do that. But there is a 23% interest!
It will take you over 53 months, nearly SIX years to pay it off! In six years that TV will be a piece of crap (no one is saying it isn’t already…). And the “savings” you get from the discount they offer, nothing compared to the extra $913 in finance charges, and that’s if you NEVER miss a payment.
They are clearly trying to take advantage of their credit applicants. If you can’t make payments and they reclaim your purchase, you pay an additional 20% return fee on top of the 9% late payment fees.