Advance Fee Credit Card? Uhhh…No, Thanks

   Say, do you have bad credit? Have you recently received an introductory offer letter from a credit card company you have never heard of before, billing its product as an “advance fee” card? Does the letter ask you to dial a toll-free number, which results in the keying in of an activation code and a conversation with someone who asks for your bank account number? If the above scenario sounds at all familiar, you are in trouble.

   The typical M.O. goes something like this: First, the fees. Before you have even had a chance to make a purchase, you are hit with charges for activation, processing, credit protection, renewal, and other things that will not make even that much sense. Next comes the ridiculous fine print via mail. Believe it or not, you can not even use your new card at most stores! It’s only good for purchasing merchandise from the card issuer’s own catalogs. What??

   Beyond all of this (as if there needed to be more to convince you what a waste of time the whole proposition is), these cards most likely do not — in any way, shape or form — help you establish or build credit. Though they claim to report activity to credit bureaus, they often fall back on language in their membership agreements that allows them to flake on this duty.

   If you are looking for a way to repair your credit, there are real cards out there designed for people like you. There are also prepaid debit cards, which are a very low-risk means of getting back on track. Pre paid debit cards also report your activity to the credit bureaus.  If you have no credit, it is one of the easiest ways to establish credit.  After a period of time, they have the ability to convert to a regular unsecured credit card.  You can find additional information on how to obtain a prepaid debit card at 

   No matter what, make sure you do your research on the issuing bank, and absolutely ensure the card can be used for regular purchases. (I am looking at one of the aforementioned catalogs right now, and it is especially awful. Who is going to pay $89.95 for a “Magic Hot Dog Toaster”? A $500 air purifier decorated in the colors of your favorite college team? Come on.)   Creditors are notorious for preying on people who are trying to establish or improve their credit.  There are reputable as well as unreputable firms out there, so do your home work and investigate them carefully.  The sooner you get your credit on track, the sooner you can begin to enjoy the benefits of what a solid credit profile can afford you.

   If you have already fallen prey to this scam and had money debited from your bank account, you can file an affidavit with your bank to revoke the debit. If more than 60 days have passed, request to file a fraud complaint. It is a major pain, but do consider closing your bank account to avoid having money stolen. And please do the rest of us a favor by reporting the whole mess to the FTC.  You may also want to consider contacting your local attorney general.