For the past several months we've been working feverishly at Fool Labs™
to develop a scientifically sound method for tracking the arrival of the
single best credit card solicitation with amenities unequaled by all others.
We've modified the experiment so that you, dear Fool, can do it at home:
Step 1: Save all the credit card offers that you receive over the
next two to three months. (This will probably require a spare bedroom or
at least a large portion of unused garage and a fairly sturdy set of shelves.)
After three weeks, if you are an average red-blooded consumer, you should
have filled about four crates.
Step 2: Now, organize them by card issuer. Visa in this pile, Mastercard
in that pile, regional department stores in another pile.
Step 3: Further divide them by platinum, gold, silver, bronze and
within those piles by interest rate (5.9%, 6.9%, 9.9%, etc.).
Step 4: Now take all the "absolutely LAST TIME you'll receive
THIS offer!!!" offers (random capitalization, italics and over-punctuation
is theirs) and put those in a separate pile.
Step 5: You should now have one pile.
What you will have learned from this little exercise is this: Offers trumpeting
"0% Interest!" or "Free Miles With Every Dollar You Charge!" are tempting.
But they are hardly rare. More than 1 billion solicitations are mailed
out each year. We're pretty sure a few of those have been slipped into your
mail slot.
And that "Absolutely LAST TIME you'll receive THIS offer!" offer?
It is probably just the first of about 3,704 nearly identical solicitations
that are addressed to you.
The offers for credit weren't always so plentiful. Back when bell bottoms
and moon boots were big the first time around, lenders extended credit only
to the most stable of customers -- those with pristine credit records who
had never fallen delinquent on payments. Then lenders got Wise. In the '80s
they jacked up their lending rates and granted long lines of credit to the
masses, figuring that the number of people who would default on credit card
payments would be nominal compared to what they could make from interest
and fees.
They figured right. There are more than one billion cards in circulation
-- four for every man, woman, and child -- with the average cardholder carrying
a $5,800 balance from month to month and paying 18.3% in interest to do so,
as we mentioned in our introduction.
We hope you take away one important lesson from this brief preamble: Fools
don't fall for just any credit card come-on. They watch out for outrageous
annual fees and low-interest rate offers that last less than 6 months. Fools
pore over the fine print for restrictions on air miles and other rebate "deals."
We know it's only a matter of days before the right offer comes along --
one with no annual fee and at least a 25-day grace period. Surely one of
those one billion mailers is right for you.
Now, how to handle the Creditus Cardus
Solicitationus flood.
-- Dayana Yochim (TMF School)
Next: Stop the Solicitations! »
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