Every now and then, a credit card offer gets me so mad, I want everyone to know about what a rip-off it is. So please help me spread the word about this egregious come-on: The Upfront Reward Visa Platinum card from Universal Savings Bank.
To be approved for the card, which comes with a 9.99%, 10.99%, or 11.99% interest rate depending on your credit report, you have to transfer a balance of $5,000. There won’t be a fee on the transfer and the bank says you’ll get your reward "right away," which will be your choice of one of the following:
- A name brand notebook computer (e.g., Dell and HP)
- An HD flat screen television (Philips and Sharp)
- An Oreck vacuum cleaner
- An $800 gift card for golfing paraphernalia
Don’t owe $5,000 on another card? No worries. Universal Savings will give you a cash advance of up to $2,500. There won’t be a fee and you’ll pay only 9.99% to 11.99% interest on it – not the 19.99% you’ll have to pay if you take out other cash advances.
The bank says it’s already given away over 75,000 upfront rewards, and that there’s "never been a credit card offer quite like the Universal Savings Bank Upfront Reward Visa Platinum offer. And because you’re a savvy consumer, we know you’ll agree."
I don’t agree at all!
Three major catches:
1. The rewards aren’t worth the $850 or so the bank says they are. It’s easy to find the merchandise online for a lot less money. For example, I just found one of the notebook computers for under $500 and one of the televisions for $580.
I was just beginning to research the prices of the other rewards when I came upon a great article by Kevin LoVecchio, who received an offer for the Upfront Rewards card in the mail a few months ago: High-Risk, Low-Reward: The Perfect Investment? While some of the particulars have changed, his reporting shows that the deals are lousy.
2. You have to maintain a balance of $3,500 for 18 months! According to the bank, "If your balance falls below $3,500 at any time during the first 18 months after your account is open, you will be in default and your account will be assessed a one-time fee of $600."
Ouch! Or as Kevin puts it:
"Imagining that you can perfectly manage your purchases and payments to maintain the exact $3,500 minimum monthly balance, you get significantly overvalued computers and accessories at an out-of-pocket purchase price that is either break-even (at best) or hundreds of dollars more than simply purchasing online (at worst). Make one mistake along the line and you can add in an additional $600 expense, paid right into the greedy pockets of the credit card companies."
By the way, that $600 doesn’t include the interest you’ll have paid on the $3,500 balance, which could amount to around $650, if you kept the $3,500 balance for 17 months before you blew it and paid back some of that amount.
3. You won’t get your reward right away. When the bank says "right away," it means after you’ve been approved and the balance transfer goes through, which could take up to a month. You should receive your reward "within weeks" after that. I don’t know about you, but that’s not exactly my definition of right away.
The bank says it’s "brought a breath of fresh air" with Upfront Rewards. I beg to differ. I think it stinks.