NEW YORK (MainStreet) — Everyone gets credit card offers in the mail. Most people either fill them out when they need a card or throw them out when they don't. But how can you really evaluate which credit card offers you’re getting in the mail are worth junking and which are worth applying for? We spoke to some credit card experts to get you the quick and dirty on whether or not you should apply for the card or throw it in the recycling bin.
Do Good Credit Card Offers Come in the Mail?
One question a lot of people ask is whether or not they’re going to even get good credit card offers in the mail. The answer is yes, but... they still might not be the best offers for you. Jason Steele, a credit card expert with CompareCards.com, points out that a lot of times, what you're getting in the mail isn't random at all. "The credit industry is very interested in what they call 'targeted offers,' he said. "You might even get a better deal than publicly offered cards."
Mike Sullivan, director of education with Take Charge America, notes that "credit card companies are selective." What this means is that they buy lists of consumers to help them better market their products to the appropriate people. "If you have bad credit, there’s no need to apply for a higher-end credit card offer you get in the mail," he said.
The bottom line? Go ahead and apply, but only after you’ve spent some time doing your own due diligence. Look around. See what other offers are available. Particularly in the age of the Internet, it shouldn’t take you a lot of time to poke around, see what else is out there and compare apples to apples.
"I haven’t found any offers that come in the mail and aren’t available from other sources," says Sullivan. "Even if I get a good offer in the mail, I usually look online and find a better one."
O.K., So What Am I Looking For?
You’re basically looking for the card that’s best suited to your and your credit needs. "About half of all cardholders carry a balance, so they want a card with a low or zero introductory APR for balance transfers," says Steele. These consumers also need to primarily focus on getting themselves out of debt.
"I don’t care about APR or balance transfer fees, because I don’t carry a balance. I'm looking at annual fees and rewards," he says. For consumers in this category, looking around and evaluating rewards programs can be a bit daunting; however, the better your credit is, the better access to rewards programs you’re going to have. It's worth taking a peek around every six months or so.
Does Anyone Actually Take The Card?
Discover and American Express both have one major drawback: they’re not accepted nearly as many places as Visa or MasterCard. "If you’re just going to Target to get groceries, you can go ahead and get a Discover card," says Sullivan. However, for people who travel a lot, it's not going to be a very good option. On the other hand, American Express is actually a more attractive card for people doing more international travel.
Are There Any Red Flags to Look Out For?
Steele believes there are two major red flags to look out for when selecting a credit card offer you got in the mail. First, credit cards that have no grace period. "There are cards that don’t let you pay in full and avoid interest charges," he says. No matter what you buy, you're paying interest on it, even when you don’t carry a balance. "Even if you pay your bill the moment you get it, there are going to be interest charges."
The other red flag is a monthly fee. This is more or less just an annual fee that’s charged on a monthly basis. "These are designed for people with very poor credit," he says, "but even those people generally have better options."
At the end of the day, a credit card is just another financial product. You should do the same research on it that you would with a mortgage or a car loan -- especially if that offer comes in the mail.
--Written by Nicholas Pell for MainStreet