January 7, 2010
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News: 2009 Rewards Awards, the Worst
CitiBank are not only the best for low interest credit cards but also, the worst for offering tangible cash awards. This would be the xtra-cash credit card reward system. It deserves note because it's so easy to score up points and the advertisements are incessantly in your face. But when it comes time to redeem anything well...let me put it this way; I easily racked up $1,000 worth of xtra-cash in their system but learned that the only way to redeem anything was to shop on their hosted site where you get to use their dollars at a 1-to-10 ratio. I would have to purchase $10,000 worth of merchandise from this site to redeem my points. Meanwhile, everything has already been marked up 20% over what you'd pay in the store for for the same thing. It would cost me a $1,000 loss just to redeem those points. Go figure.
Beware also, of the trojans. Companies like HSBC will lure people into applying for a new credit card account and promise you the moon. Once you commit and allow your credit report to reflect a 'hard hit' they run the numbers on you. (It is said that, theoretically, there really are winners to this contest but as of yet, I have not seen the proof). What I have seen is for a person who has never had a derogatory (or otherwise bad report), a credit card account will be issued and set up with very different terms then those presented at the time of application.
A brand new credit card will arrive in the mail with only a $200 credit limit and carrying a 24% APR. Further, the next thing you know, you get your first statement with a $20 charge tacked on as an annual fee. Should you ever charge $5 on the card and be late on a payment by a day, you will be hammered for a $20.00 'default penalty' fee (even though you only owe $5.00 on the card).
This turns out not to be the sweet deal which was presented to you when you applied. Moral: "Beware of Greeks bearing gifts and HSBC credit cards". They won't tell you they're HSBC unless you ask them, they like to hide under innocent monikers.