those credit card offers of $

17 years ago

I have 1 Citi Bank card that I use most of the time and I keep a 2nd card from my credit union so that I will have an alternative should the need arise. What I am having trouble refusing are the credit offers that come with a financial incentive. I am always asked on by Amazon if I would like to get $30 off my purchase. Of course I would, but it means getting another card. Amazon is pretty easy to refuse because they require wayyyy too much information, but I succumbed to Sears the other day when they asked me if I would like my purchase to be free. And I don't understand why Citi Bank keeps offering to give me $50 if I will take out a 2nd card with them. What's up with that? I am very tempted because I would just lock the card in my safe once I had made my initial purchase. What would I be risking? Have you taken up any of these offers?

Comments (9)

myfask
17 years ago
devorah
Everytime you apply for one of these cards your credit takes a hit too many and it can lower your credit score.
The credit cards want you to have the card so maybe tempted to use them, run up balances and pay them interest.
People make the same mistake playing the "balance transfer" game. They keep transfering the balance form one "0" apr card to another.
The problem with this is you are not developing a long term credit history.
Should you have a major purchase in the future you want the best possible credit profile so you get the best rates.
Karla
cindyb_va
17 years ago
devorah,

Just remember the golden rule of business...no such thing as free...

These companies make these great offers because statistis tell them that eventually they will make the value of their offer back...and more. From YOU.

The second card deal...they hope you will give the extra card to a child/teen to use for emergencies, school, etc.
The other thing you have to watch for is sometimes the annual fee is *per card*.

Your idea with the two credit cards is, IMHO, perfect.
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Hi liz h, I thought for a minute there that you'd been listening to one of those infomercials on TV ... ... or paying attention to one of the email messages that you've been getting! Then I wondered if you were making the infomercial! Likely that'd pay even better. On reading your message, I'm considering doing something similar ... only the rate I've been offered is 0.9%, and I'm not sure for how long ... into sometime next year, I think. As it came in a few weeks ago, maybe if I call them I can get them to extend the cut-off date for a while. I've thinking of buying some stocks down the road about three months using my line of credit, after cash kitty for (more or less monthly) investing is used up ... but then thought that maybe, instead of that, I should buy them using my regular credit card, then transfer the amount to the minimal interest card when it's issued. But I guess that I don't need to do that - I can transfer from any location, so I can transfer from my line of credit loan. The credit card loan rate is ... higher ... higher ... quite a lot higher. If I let it run over due date. But ... if it's on the current card now, even if the new one may not be working by the due date of the current card ... I can pay off the card loan from the LOC before its due date, then transfer when the new card's working (working for [almost] free - where can you get a better deal than that?). I'll have to call them to find out what credit limit they'll offer. Good wishes for success in your financial finagling. ole joyful
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Greg H, Your message tells me how you are managing ... debt. Wisely, yes. To your advantage, yes. It's still ... debt. D-E-B-T - a four-letter word! Cut it whatever way you like, it's still debt. Which can be become a *serious* problem when it's misused. That you are obligated to pay - even if you get a temporary lay-off, or with certain specific skills no longer in demand, a pretty well permanent one, or suffer permanent disability, or have a kid who subsequently develops a need for $50,000. worth of uninsured medical care - or even die. There's only one way you can avoid it - go bankrupt. Which steals from other folks who gave you services in good faith, from which you walked away. Some do that several times - walk away ... smiling. The message was, as I said earlier, not directed to the likes of you or people anywhere near as smart as you when it comes to managing money. Like, maybe, your friend's kid who, though s/he was in college, wasn't too smart when it came to money management. A local Canadian financial consultant complains that they don't teach much about it in school. If the corporations, including the financial ones, get their feet more heavily into the schools, there'll probably be even less. In his book, he offers advice on how to make a rate of return of 40% or better on your money - guaranteed. Proviso - you can only make that (before-tax) rate on store-issued credit cards whose balance you pay off. Maybe, had your friend's offspring not been willing to pay attention to his/her parent, as being out of the dark ages when it came to instructions as to wise ways to live, s/he'd have listened to you had you offered some advice. The reason for making the point about it actually being a debt that was being incurred when you use the card was to try to get some people who know much less than you about money management to begin to think about it somehat differently. The point of the message was to show them how they might reduce their cost somewhat if they followed a different pattern than some may have started through following the easy path of signing up for a store-issued card. I approached it with some trepidation, for I was advising ... taking out an additional card. Which could (too?) easily have a major debt run up on it, as well - leaving the holder in a deeper hole than previously. Should I become aware of that result springing from advice which I had given, it would trouble me greatly. Much more concerned than I was about complaints such as yours - which I hear about half of the time that I make this point. By the way - you didn't say that I was wrong - you just said that everybody does it, right? By the way, elsewhere in the message, when I was not dealing with the specific issue of the debt aspect of the card, I referred to them without using the quotation marks. Your country - government and people - is drowning in debt. And digging the hole deeper, daily. The "value" of your dollar is dropping - had you noticed? Good wishes to you for wise management of your money - and assets, Greg. ole joyful
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Karen_sl
17 years ago
And, a Sears card is with citibank...
greg_h
17 years ago
Okay, I'm going to play Devil's advocate.

Everytime you apply for one of these cards your credit takes a hit too many and it can lower your credit score.

How many hits before it will lower your credit score? If you were to just do this periodically (say once a year) would it affect anything?

These companies make these great offers because statistics tell them that eventually they will make the value of their offer back...and more. From YOU.

Actually, statistics tell them that on AVERAGE they will make their money back and more. You could be one of the ones that benefits from this deal, if you are careful about it.
myfask
17 years ago
greg
It depends on what type of credit you are starting with. higher credit scores 750+ can "absorb" inquires better than a 650+ score
IMO a $20 savings isn't worth the credit risk now should I be spending $2000 and am offered 10% or a $200 saving I might reconsider.:)
devorah
Original Author
17 years ago
I have never had a credit problem, and I don't expect to make any major credit purchases. Hmmm still tempted.

Yes, I was surprised to find out that the Sears card is Citi Bank, but it doesn't give me 1% back on my purcases so I don't ever plan to use it.

This all explains why, when I switched my AT&T card over to a Citibank card, the amount I could borrow was sharply reduced. I'll have to watch that I don't go over. I have my credit union card if I ever do need to make a major purchase. It pays back 1%, but not the 5% Citi bank pays on gasoline and groceries.
myfask
17 years ago
devorah
Citibank bought AT&T Universal Card about 8 years ago. 6 years ago is when they merged the companies.
Citibank also handles the Home Depot accounts.
you also want to keep an eye on your balance vs your credit limit, one way they determine your credit score is the % of credit that you use.
I know it is confusing.
Karla
jules8429
17 years ago
FYI-Citibank is changing the amount back on it dividend card. Mine changed in late October to something like 2% back on gas and groceries instead of the 5% previously. It seems like they also dropped many of the other categories that had the higher cash back percentages. I've stopped using it for gas and switched back to my BP Visa-get 5% back at their gas stations with it. I'm sure citi doesn't really care that I've cut back using their card-I always pay it off every month so they have actually lost money with the 5% rebate!
joyfulguy
17 years ago
Hi everyone,

Get up earlier in the morning.

That'll give you some extra time to figure ways to out-con the masters of con at the con game.

Or - perhaps you could do that while in gridlock on your commute, instead of letting your blood pressure rise to calamitous levels.

My relations with Citi were getting a few letters a year offering me a loan of up to about $3,500.00.

When I called to ask the rate ...

... it was usually around 30% - and that's for one year, not four!

I told them that I have a fully secured line of credit for more than they're offering - at 6% (then ... but 6.25%, last time I asked: it's unused at the moment).

So - their sending me any more (addressed) mail was a waste of trees, though it did benefit Canada Post, but it wasted their time and mine, as well.

So - let's just can it, huh?

Haven't got such a letter since.

But - their guy did chastise me for being less than courteous - I thought that a bit of a switch!

Have a lovely weekend - nice sunny day here, but yesterday the local city got a foot and a half of snow, though only about 4 inches on the farm, about 15 miles away.

ole joyful

those credit card offers of $

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