When did so many people become credit card experts? It can seem like everyone and their mother wants to tell you how some card will improve your finances.
But taking advice from just anyone about credit cards could end up costing you money, hurting your credit score or leaving you in credit card debt. Before you accept any of their recommendations, first ask yourself why those people are sharing recommendations.
“Generally speaking, you should question the motives of the people giving you advice or recommendations,” John Ulzheimer, a credit expert formerly of FICO, Equifax and Credit.com. “Are their recommendations based on research, or are they being paid to point people towards certain credit card options, or is it part of their jobs to do so.”
We’ve rounded up three places where you should definitely pause before taking any advice.
On a plane
We’ve all been there -- trapped on a plane -- a nearly indecipherable message blaring over the loud speakers about a limited-time 65K welcome bonus that could definitely cover your next flight. The flight attendant walks down the aisle with a fake smile, holding a credit card application out toward you.
These are often billed as an “act fast” offer, but more often than not, the promotion is the same as an offer on the card issuer’s website.
“If you’re interested in the credit card, take the application, but don’t complete it on the plane,” said Aaron Hurd, credit card expert and CNET Money Expert Review Board member. “Most airlines offer several tiers of their co-branded credit cards, and the one being offered in-flight may not be the best for you.”
It’s always best to do your own research and make sure a credit product won’t just support you in the moment, but will continue to be useful for the length of your time with it.
At the checkout
You’re at the checkout counter and the cashier says you could save $20 off this purchase by applying for their store card. It sounds like a pretty good offer, but is it ever a good idea to take a credit card offer on the spot?
Regardless of how much you’ll save at the moment, retail cards often come with high APRs, relatively useless perks and, in some cases, predatory terms like retroactive interest on special financing plans.
“In fact, they’re structured more like subprime credit cards with low limits and higher than average APRs,” Ulzhemier said. “I generally recommend avoiding those and using general-use credit cards instead.”
There are some exceptions to the rule, but for the most part, you’re better off using a general rewards card instead. They’re less restrictive, more rewarding and typically come with better terms.
But again, you’re better off waiting until you’re out of the checkout line before making an important financial decision.
Surprise: Advice you see on social media may not be reliable. But it hasn’t stopped content creators from touting ways to make, save and grow your money on “Fintok” and other platforms.
“Social media is entertaining, but you should always do your research,” said Jason Steele, credit card expert and CNET Money Expert Review Board. “There are many sites online with experts offering advice, so there’s no reason to make a quick decision when you see a short video.”
Like with everything else, credit card advice you see on social media should be more or less used as a jumping-off point. Always vet the information you find before applying it to your financial life.
And consider why the influencer or social media platform is offering this advice. Is it a “get rich quick scheme,” for example, or are they genuinely interested in helping you?
“Some social media influencers will latch onto any trend that they believe will get them more followers,” Hurd said. “Others will happily hock any product to their followers for cash.”
Even if it’s people you know chatting up their credit card picks, consider their motivations. Are they telling you to use their QR code? That could mean they’re getting a referral bonus. It doesn’t necessarily mean the recommendation is bad, but definitely do your own research to see if the card’s benefits and terms work for your financial situation before applying.
Seeking out trustworthy and knowledgeable sources is the best way to get sound credit card information, but it’s essential that you consider your personal circ*mstances and financial situation before accepting advice from anyone.
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