FTC FACTSfor Consumers

CREDIT

1-877-FTC-HELP

FEDERAL TRADE COMMISSION FOR THE CONSUMER

www.ftc.gov

'Gold' and 'Platinum'

Cards

f you're looking for credit, be wary of some 'gold' or 'platinum'

card offers promising to get you credit cards or improve your

credit rating.

While sounding like general-purpose credit cards, some 'gold' or 'platinum'

cards permit you to buy merchandise only from specialized catalogues. Marketers of these credit cards often promise that by participating in their credit programs, you will be able to get major credit cards (such as an unsecured Visa or

MasterCard), lines of credit from national specialty and department stores, better

credit reports, and other financial benefits.

I

John Doe

0000-0000-0000-0000
Facts for Consumers

Rarely, however, can you improve your

credit rating or get major credit cards by

buying 'gold' or 'platinum' credit cards.

Often the only major credit card you might

get is a secured credit card that requires a

substantial security deposit with a bank. In

addition, many of these credit-card offerors

do not report to credit bureaus as they

promise, and their cards seldom help secure

lines of credit with other creditors.

Such 'gold' and 'platinum' credit-card offers

usually are promoted through television or

newspaper advertisements, direct mail, or

telephone solicitations using automatic dialing

machines and recorded messages. People who

live in lower-income areas often are the target

of these sales pitches.

Watch Out For...

Be wary of 'gold' and 'platinum' card

promotions that:

✓ Charge upfront fees, without saying

there may be additional costs.

Some 'gold' or 'platinum' card promoters

charge $50 or more for their cards. Only

after you agree to pay this fee are you

told there's an additional fee, sometimes

$30 or more, to get the merchandise

catalogues. Yet, these catalogues are the

only places you can use the cards.

✓ Use '900' or '976' telephone

exchanges.

Ads for 'gold' and 'platinum' cards may

urge you to call numbers with '900' or

'976' exchanges for more information.

You pay for phone calls with these prefixes  even if you never get the 'gold'

or 'platinum' card. The cost for these

calls can be high.

✓ Misrepresent prices and payments for

merchandise.

You're not allowed to charge the total

amount when you buy merchandise from

'gold' or 'platinum' card catalogues.

Instead, you often must pay a cash deposit

on each item you charge  an amount

usually equal to what the company paid

for the product. Only after you pay your

deposit can you charge the balance. Also,

catalogue prices can be much higher than

discount store prices.

✓ Promise to easily get you "better

credit."

Marketers of 'gold' and 'platinum' cards

often claim its easy to get major credit

cards after using their cards for a few

months. In fact, the only major cards you

usually can get through these marketers

are secured. A secured card requires you

to open and maintain a savings account as

security for your line of credit. The

required deposit may range from a few

hundred to several thousand dollars. Your

credit line is a percentage of the deposit,

typically 50 to 100 percent.

How To Protect Yourself

Follow these precautions to avoid becoming a

victim of 'gold' and 'platinum' card scams:

✓ Think twice about any offer to get

"easy credit."

Be skeptical of promises to erase bad

credit or to secure major credit cards

regardless of your past credit problems.

There are no "easy" solutions to a poor

credit rating that's based on accurate

information. Only time and good credit

habits will restore your credit worthiness.

✓ Investigate an offer before enrolling.

Contact your local Better Business Bureau, consumer protection agency, or

state Attorney General's office to see if

any complaints have been filed against a

particular promoter of 'gold' or 'platinum' cards.
Facts for Consumers

If a marketer promises that a card is

accepted at certain retail chains, verify it

with the stores.

If a marketer assures you that reliable

information about you will be reported to

credit bureaus, call the bureaus to confirm

that the merchant is a member. Unless

'gold' or 'platinum' card merchants are

subscribers to credit bureaus, they won't

be able to report information about your

credit experience.

✓ Be cautious about calling '900' or '976'

telephone numbers.

Calls to numbers with '900' or '976'

prefixes cost money. Don't confuse these

exchanges with toll-free '800' numbers. If

you dial a pay-per-call number mistakenly, contact your local phone company

immediately. They may be able to remove

the charge from your bill.

For More Information

If you have problems or questions about

'gold' or 'platinum' cards, contact your local

consumer protection agency or state Attorney

General's office.

You also may contact the FTC. The FTC

works for the consumer to prevent fraudulent,

deceptive and unfair business practices in the

marketplace and to provide information to

help consumers spot, stop and avoid them. To

file a complaint, or to get free information on

any of 150 consumer topics, call toll-free, 1-

877-FTC-HELP (1-877-382-4357), or use

the complaint form at www.ftc.gov. The

FTC enters Internet, telemarketing, and other

fraud-related complaints into Consumer

Sentinel, a secure, online database available

to hundreds of civil and criminal law

enforcement agencies worldwide.
Federal Trade Commission

Bureau of Consumer Protection

Office of Consumer and Business Education

October 1996

) & ('(5$/75$'( 200,66,21 )7& 25 +( 21680(5

)7&+(/3 ZZZIWFJRY

Facts for Consumers