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Separated? Divorced? Bankrupt? Widowed?

Make the call NOW and get the credit you deserve! Even if you've been turned down before, you owe it to yourself and your family. Your major credit card is waiting.

If you have no credit or a poor credit history, this ad may appeal to you. Before you respond, read this brochure. Using a secured credit card can be an effective way to build or re-establish your credit history. However, be aware that some marketers of secured credit cards make deceptive advertising claims to get you to respond to their ads.

This brochure explains the differences between a secured and unsecured credit card, describes how marketing scams are used to sell secured credit cards, and tells how to recognize and avoid deceptive credit card offers. Some organizations that offer additional consumer credit information and assistance are listed at the end of this brochure.

Secured Versus Unsecured Cards

Secured and unsecured credit cards work the same way; both can be used to pay for goods and services. However, a secured card requires you to open and maintain a savings account as security for your line of credit; an unsecured card does not.

The savings account for a secured card may range from a few hundred to several thousand dollars. Your credit line will be a percentage of your deposit, typically from 50 to 100 percent. Usually, a bank will pay interest on your deposit.

Also, you may have to pay application and processing fees that sometimes amount to hundreds of dollars. Before you apply, be sure to ask what the total fees are and if they will be refunded if you are denied a card.

A secured credit card also typically requires an annual fee and has higher interest rates than unsecured cards.

Deceptive Ads and Scams

The Federal Trade Commission (FTC) has taken action against companies that deceptively advertise Visa and MasterCards through television, newspapers, and postcards. The ads may offer unsecured credit cards, secured credit cards, or not specify a type of card. The ads typically are phrased to make you believe you can get a credit card simply by calling a telephone number listed in the ad. Sometimes the number is not toll-free. A "900" number service, for which you will be billed just for making the call, may instruct you to give your name and address to receive a credit application, or it may give you a list of banks offering secured cards, or direct you to call another "900" number at an additional charge to get more information.

Be aware that deceptive ads often leave out important information.

* They often omit the cost of the "900" telephone call, which can range from $2 to $50, or more.

* The ads often do not mention a required security deposit, and application and processing fees for the secured card.

* The ads frequently fail to say anything about income and age requirements.

* The ads may not mention the annual fee for the secured card and a higher than average interest rate on any balance.

How to Avoid the Scam

To avoid being victimized by a secured credit card marketing scam, look for the following signals.

* Beware of offers of easy credit. No one can guarantee to get you credit. Before deciding whether to give you a credit card, legitimate credit providers examine your credit history through a credit report.

* Think twice before making a call to a "900" telephone number for a credit card. Remember: you pay for calls with a "900" prefix and may never receive a credit card.

* Be wary of credit cards offered by "credit repair" companies or "credit clinics." These businesses also may offer to clean-up your credit history for a fee. However, you can correct genuine mistakes or outdated information yourself by contacting credit bureaus directly. But remember, only time and good credit will repair your credit report if you have a poor credit history.

Credit Reporting

If you are considering a secured card as a means to build or re- establish a credit record, make sure the issuer reports to a credit bureau. Your credit history is maintained by companies called credit bureaus that collect information reported to them by banks, mortgage companies, department stores, and other creditors. If your card issuer does not report to a credit bureau, the card will not help you build a credit history.

For More Information and Assistance

* To build a credit record, you may want to apply for a charge card or a small loan at a local store or lending institution. Ask if the creditor reports transactions to a credit bureau. If they do and you pay back your debts regularly, you will build a good credit history.

If you cannot get credit on your own, you also can ask a relative or friend with a good credit history to act as your co-signer. The cosigner must promise to repay the debt if you do not.

* If you are interested in applying for a secured credit card, the BankCard Holders of America (BHA) provides a list of institutions offering secured cards. BHA's "Secured Card List" is free to BHA members, $4.00 for non-members. Write to:

BankCard Holders of America
560 Herndon Parkway, Suite 120
Herndon, VA 22070.

* If you are having difficulty paying your bills, you may want to contact a Consumer Credit Counseling Service (CCCS). This is a non- profit organization with more than 850 offices located in 50 states that counsels heavily-indebted consumers. Check the White Pages of your telephone directory to get the number for the CCCS office nearest you, or call 1-800-388-2227 using a touch-tone phone. If you have other questions, write or call:

National Foundation for Consumer Credit
8611 Second Avenue, Suite 100
Silver Spring, MD 20910
(301) 589-5600

For a complete list of consumer and business publications from the FTC, send for a free copy of Best Sellers at the address listed above.

Where To Complain

If you have problems or questions about a secured credit card marketer, contact your local consumer protection agency or state Attorney General's office. You also may send your complaint to the FTC. Write to: Correspondence Branch, Federal Trade Commission, Washington, D.C. 20580. Although the Commission cannot resolve individual disputes, the information you provide may indicate a pattern of possible law violations requiring action by the Commission.

Facts for Consumers from the Federal Trade Commission

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