Image by 401K via FlickrA few years ago, due to a series of unfortunate events (some self inflicted and some beyond my control) I got into a little bit of financial problems. Consequently, I ended up in some very deep credit card debt. I tried a number of things to get it under control, but eventually had to file for bankruptcy.
It was a tough time, but a necessary time in my life. An important lesson was learned, and I have been able to get to the point where I am living within my means. It is still a bit difficult at times, especially during this time of year or when an unexpected expense comes up.
Slowly but surely, I have been rebuilding my credit. The bankruptcy was discharged almost three years ago. I have been able to get a couple of new cards for emergencies that have a fairly small credit limit unlike those I had before that had a limit of several thousand dollars. I definitely do not want to go there again.
Every now and then, I get credit card offers in the mail telling me that I have been pre-approved for their credit card. A lot of these are cards for people trying to rebuild their credit. I take a close look at the offers and definitely read the fine print. They pretty much all get ripped apart and thrown away.
A lot of the offers have a high annual fee that automatically is charged to your account when you accept their offer. I have seen some fees as high as $300 which wipes out most of the credit limit they are offering, so you are always behind the proverbial eight ball. Of course, all of them have high interest rates.
The other day, I opened one offer that said I was pre-approved for a minimum of $300. The card had an annual fee of $75. The interest rate, however, was what really stood out to me. It was 34.9%. Wow. I think I could get a better rate from the loan shark down the block. One might even go so far as to call it "usury." Needless to say, that is one offer that went straight to the trash.