Existing Capital One MasterCard holders may or may not be getting the same deals, but new credit card offers from Capital One are arriving in the mail to new credit card users. These are not reserved for highly qualified borrowers with high credit scores either.

How do I know?

One good piece of financial advice that I frequently give is to use phony names when signing up for certain things, especially promotional offers and magazine subscriptions. The reason is that these companies like to turn around and sell your name and address to other companies that then send you plenty of junk mail. These mailing lists can be more profitable than the actual business of writing a magazine or newsletter!

Nothing helps sort out a real “Urgent! Response Required,” mailing from a phony one like seeing one of the fake names that you used to sign up for something in the past. Just like the one that appears on my no annual fee Capital One No Hassle Rewards World MasterCard offer that came to my house under a name used for magazine subscriptions. Since that isn’t even a real person, let alone someone with a high credit score, we know that these offers are either going out blind, or people with low credit scores can qualify for these credit cards.

Capital One Miles Rewards

This particularly Capital One MasterCard looks like it comes with the standard NoHassle miles reward chart and earning points follows the basic Capital One miles rewards earning plan. You get 1 mile for each $1 you spend. The miles do not expire and there is no limit to the number of miles you can earn with the credit card.

A  bonus rewards points offer comes in the form of 30,000 bonus rewards miles comes with plenty of fine print. You actually get a 10,000 mile bonus reward with your first purchase. Then, if you spend at least $3,000 per year on the card, you get another 10,000 NoHassle miles reward bonus on your first anniversary and then 10,000 more No Hassle bonus miles on the second anniversary. So it might be a while before you want to use that Capital One Rewards Catalog to pick your free reward.

Also, there is no annual fee and this is a credit card with 0% interest rate APR on purchases until February 2011. After that, the regular interest rate is 17.99%, but that is not a fixed interest rate. Instead, this MasterCard from Capital One comes with a variable APR. The variable interest rate is calculated as PRIME + 14.74%. OUCH!

Folks, pay attention to these rates from banks on your credit card offers. 17.99% is not a low interest rate by any stretch of the imagination, but when the PRIME rate climbs to a measly 5%, which is still very low, by the way, this card will have an interest rate of 19.74%. That’s 20% interest on a credit card. No amount of miles is worth that.

Related posts:

1. Capital One Rewards Catalog – No Hassle Miles – Travel Rewards
2. Capital One No Hassle Rewards Catalog

Capital One World MasterCard No Hassle Rewards Miles originally published at Personal Finance Blog - FinanceGourmet.com

Citibank raised the interest rates for customers with high credit scores who had never missed a payment.  Virtually every credit card company opposed the very tame reforms recently passed into law by Congress.  The sad truth is that is isn’t a matter of if your credit card issuer will try something sneaky, it’s a matter of when, and how bad will it be.

While there is always tension between a company that must turn a profit and consumers who want to get as much as possible for the lowest price, with most relationships between a business and consumer there is at least some degree of fairness.  Unfortunately, this is seldom the case for the relationship between credit card company and credit card user.  Instead, in this relationship, the credit card company works hard to hook a customer and then slowly tries to squeeze the maximum profit out of them.  Between absurd fees, sudden contract term changes, and just plain old subterfuge, your credit card company is out to get you if you stop paying attention.

Top Credit Card Company Tricks – 0% APR Credit Card Offers

While there are many areas the banks that issue credit cards are less than forthright, one area that the tricks come fast and furious is with 0% credit card offers.  Whether it is a zero percent interest balance transfer offer, or an offer for 0% interest for an introductory period, you have to stay on your toes to stay ahead of all the little tricks credit card issuers play.

Here, are the most common credit card company tricks on 0% interest credit cards.

1. Transaction Fees – Buried in the middle of the text of a full-page letter or even on the back of the page in lighter gray text is the notification that this particular 0% offer is not a free offer.  Instead, you’ll be charged a transaction fee of 3% typically.  That means when you write a credit card check or fill out the balance transfer form, you’ll be charged 3% (or more sometimes) immediately.  No grace period, no chance to pay it off before there are interest charges.  If you take $5,000 with this 0% interest credit card offer, you’ll be charged $150 the second you get the money no matter how fast you pay it back.  In other words, you don’t have to pay off $5,000 before the offer expires, you have to pay off $5,150 before the offer expires. 
2. Payments Credited to Lowest Interest Balance – Here is the one that even financially savvy consumers miss.  Buried in the fine print of your zero percent interest balance transfer offer is the fact that every payment you make will be used to pay off the part of your balance that is being charged 0% interest.  Any other charges you make are going to get hit with full interest charges.  Oh, and by the way, those interest charges?  You’ll be charged interest on it too until you pay off the whole zero percent balance!  In other words, if you take $5,000 at 0% and then next month you charge $300 thinking that you will make a payment of $300 to cover it without being charged interest, you’ve fallen into the trap.  Instead, when you send in your $300 payment, the credit card company will reduce the amount you are paying 0% on by $300 and nothing will be credited to the $300 which you are going to be charged interest on.  So, after the first month you have $4,700 at 0% and $300 at the full rate.  After next month it will be $4,700 plus the $305 or whatever your interest rate makes it.  In other words, you cannot use your credit card in anyway until after you have paid off the free offer, whether that is 6 months, 12 months, or 24 months.
3. Minimum Payment Still Required – Some zero percent offers require you to still make the minimum monthly payment.  If you are late by just one day at any time, the whole 0% interest rate promotion can be revoked immediately and you start paying the full interest rate. Call and complain, and you might get this one reversed, but don’t count on it.
4. Zero Percent As Long As Balance Is Paid By End of Offer – This one is most common with department store credit cards.  The way it works is that the credit card company keeps track of how much interest you would owe if you didn’t get 0% interest rate.  Then, if you don’t finish paying off the whole zero percent balance by a certain time, then you have to pay ALL the interest, not just the interest going forward.  So, if you buy a $6,000 bedroom set with a 24 month same as cash offer and you haven’t paid off the full $6,000 then you will pay all of the interest for each and every one of those 24 months.  And how will you pay it?  It will be added to your balance so they can charge you interest on that too.

Using a zero percent interest rate credit card offer can make good financial sense, but you have to be careful to follow the rules exactly to avoid coming out worse than you thought.

Smart Rules for Using 0% Interest Offers

How do you keep from becoming another cash cow sucker for the credit card companies?  Follow these simple rules and you’ll be ahead of most of their tricks.

1. Watch Out For Transaction Fees – Use no transaction fee offers whenever possible.  These are less common from credit card accounts you already have, so you might have to look at offers for getting a new credit card.
2. Stop Using the Card – Take the card out of your wallet or purse and do the same for your spouse.  If any kids have a card on that account, get theirs too.  Put them in a safe or other place where they can’t be accidentally used until the whole zero percent balance has been paid off.
3. Setup an Automatic Payment – Many cards will allow you to setup an automatic payment.  This is a must if you have an offer that still requires an on-time monthly payment.  If you have a card that must be paid off by a certain date to avoid being charged all accrued interest, make your automatic payment enough to pay off the balance over the free time period. At minimum write down the date your account must be paid by in big colorful letters on every calendar you have.  Don’t cut it close, pay it off a month or more in advance to avoid any mishaps like lost checks or a family emergency that keeps you from remembering.
4. Don’t Zero Percent Hop – Some people try and get too cute and keep swapping one zero percent interest rate offer for another 0% offer.  While this sounds smart in theory, your odds increase of making a mistake that could cost you enough to wipe out any savings you’ve gotten up until then.  If you have no other options, then by all means, another zero percent offer is better than nothing, but focus on paying that one off right away.  Otherwise, if you want to take advantage of multiple 0% offers, close out the first one and then move on to the next one.  That way, you’ll make sure you are starting fresh each time.

Want to get benefits and make money back from using your credit cards?  Get the right rewards card and use it wisely.  Then, the benef
its you earn will out weigh the hoops you have to jump through.

Related posts:

1. How To Fight Credit Card Company Interest Rate Increases
2. New Credit Card Law Starting To Affect Credit Card Companies

Credit Card Company Tricks and How To Beat Them originally published at Personal Finance Blog - FinanceGourmet.com