Careful of Attractive Credit Card Offers - WXOW News 19 La Crosse, WI – News, Weather and Sports |

Careful of Attractive Credit Card Offers

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LA CROSSE, Wisconsin (WXOW) - Do you pay your credit card bill on time? If so, some credit card issuers think you deserve a reward.  Many companies are using this as a financial treat to lure you in.  But should you take the bait? News 19's Kacey Persson has the answer.

While being treated for Lyme Disease, Cheryl Laughlin had a "gem" of an idea: to start her own jewelry business. There was just one problem.

"I was only doing freelance work at the time," says Cheryl Laughlin, a Credit Card User, "so I was just racking up the medical bills."

Cheryl's bills were in the thousands making it tough to kick start her startup.

"I really needed a way to, you know, pay them with a credit card and kind of float them for a while until I could get regular work or regular business," continues Cheryl.

In the wake of the financial crisis, consumers like Cheryl are cautiously using plastic again, while remaining focused on paying down debt.

Greg McBride with bankrate.com says credit car issuers have taken notice, luring high-risk customers with attractive offers that go beyond slashed fees and 0% introductory rates.

"Credit card issuers, they don't issue a card that's designed to be a one size fits all for everybody," explains Greg. "Instead, they issue a variety of different cards, each one targeted to a specific type of consumer."

The latest trend is rewarding consumers who pay on-time, or pay more than the minimum. Perks include cash back or interest rate rebates.

Joe Ridout with Consumer Action says those incentives to pay down debt don't always pay off.

"If you carry a balance even a couple of times a year, the interest you;re going to pay on a rewards card, which is always going to be higher, that will generally outstrip whatever rewards you're building up," says Joe.

IF you have trouble paying your monthly bill, there are now credit cards that will spare you late fees and penalties. This is the type of card Cheryl went for.

"Since I was using that card to start up all the research and development, I didn't have to worry, 'oops, it's been sitting there for a week too long,'" says Cheryl.

But Ridout warns consumers shouldn't wait longer than 30 days to pay up.

"Unfortunately a late payment will still be reported to the credit bureaus. It very likely take down your credit score," says Joe.

To make the most of the card you choose, experts recommend you: evaluate its incentives, pay off you debt before any interest free period is up, then, focus on paying your balance in full each month.

Greg says, "That will do two thing. It will keep you out of debt but it will also help establish a strong credit history."

Cheryl will soon be debt free, and her business is thriving! She "credits" her credit card for the success.

"You just don't want to be sitting around waiting to start your business, so when it showed up it was perfect timing."

One more thing to keep in mind, these cards still charge a monthly fee if your payment is late. If you're more than 60 days delinquent, your APR could take a big hit as well.

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