Orchard Bank - a scam on a global scale with at least 44% APR.
Written: Jun 06 '07 (Updated Jun 06 '07)
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Pros: It is almost 100% guaranteed.
Cons: Very expensive to own one.
The Bottom Line: Get a secured credit card and save the trees.
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| rabodzey's Full Review: Orchard Bank Credit Card |
There is only one reason that I know of to own a credit card; any credit card, - to improve your FICO credit score. All other reasons are just fundamental misunderstanding of human psychology. There are NO reasons to own this particular card at all.
Why do we own cards?
Good question! Somehow we think it is a good idea. These are the major reasons to have a card:
1) If something happens, I have a credit card. Well, if you qualified for credit card with enough line to help you in this situation, you might as well have invested $100-200 a month in stocks and you would be a lot better off. In fact, stocks will safely give you at least 8% annually versus 19% annual loss on credit card, this is 27% difference! And, most importantly, you won’t owe anybody.
Do not trust me? Let’s check that out! Go to http://personal.fidelity.com/toolbox/growth/growth.shtml and enter $1200 annually under 8% (this is your $100 a month) for, say, 5 years (this is a period of time when nothing should happen to you unless you are a real trouble maker). So what you’ve got? Damn, $9,366! And these are all yours to spend without any cards, but wait, if you invest 10 years, you get $21,365 - a brand new car.
2) Well, but if I always pay on time, I do not have to pay anything, right Yes, right, but why would you then need a credit card at all??? You get your salary monthly. People do not get their cards to pay on time, in fact companies make most of their money on those who DO NOT pay on time, those who are late and have additional charges. Thus, you may guess, most of us do not pay on time!
3) But what about those nice benefits like free gas and cash back? Ain’t they cool? See next paragraph. They ain't.
4) So the only reason that I can see that does make sense – to get a credit card just for the sake of FICO score. Yes.
Why do companies encourage us to own Credit cards and not Debit?
This is a great question, which may worth 19% of your credit line annually, in fact, a lot more than that. It is known as a fact that people spend on average 50% more when using credit cards than those using debit cards or cash! That is why there are so many incentives attached to credit cards. But do not be fooled, even the best ones, like 2% cash back are nothing compared to 50% increase in spending. You may feel yourself better looking at your miniscule 2% return, while actually overspending thousands of dollars that you could have spent on a lovely vacations on Hawaii.
So what’s wrong with this particular card? Get to the point.
Short answer – EVERYTHING! You have to be really desperate to even consider it in a first place, but if you are so desperate, you are still better off with secured credit card from Bank of America or other serious organization.
Orchard Bank is a part of HSBC, a large financial institution with very good cards of their own, but they are not responsible for any trouble you may have with this scam. You will have to deal with “nice” people from Orchard.
Cost to open
First of all, this card will cost you near $70-80 to just open it. Silver card has a line of $300 and so you already made your 25% APR on top of the 19% that you will get in best-case scenario. That’s outrageous 44%!
Annual fee
This is just a starter, you have to pay $79 every year for the card, so you are getting an equivalent of 44% all the time. If you are late on payments, this will increase to… 60%. No kidding – you will get 35% APR. I have total APR of 32.44% and I NEVER MISSED A PAYMENT!
Mail spam
By signing up for the card you also sign up for at least two pounds of mail spam a year - save trees, avoid the card! In fact I never used any of the offers they sent, but they kept on sending the "Sign up now!" - ads. They are all based on the free trial for a month-two and then full-time fee monthly for something you will never need.
Lost card fee
Now imagine you lost your card and want to get a new one – you call them and then scam blows out of proportions: you will very likely end up being signed for couple of worthless services like security protection and credit score monitoring just to get to the stage where you will be told that you have to pay for the new card to be shipped… No way, again? – you’ll ask. Yes! $5 for shipping.
No credit line increase and additional services (for fee)
In half a year you will start feeling nervous about not being upgraded for so long and you will call them again (you will also try to get rid of all that additional stuff that was supposed to be a free trial, but now costs you $5.99 and $12.99 respectively per month). Obviously a very nice lady will waste as much of you time as necessary to deter you from any hope to get that back. You will also be told that you HAVE BEEN UPGRADED to a new Gold card. …. It will only cost you around $100 to get it and then you again have to pay annual fee for just extra $200 on you line.
...etc
It does not even make sense to talk about the case when you miss a payment or make an overdraft: you are dead.
Scam on a global scale
There is a scam like Kevin Trudeau’s books, but this is a scam on global scale(c) South Park. If you are really desperate enough to consider this card (otherwise you would not have read so far), do not do that. You can just take $500 from your pocket and ask for a secured credit card and in three-four months you will get your money back.
Best of luck, mon amie! And please let me know if you have any comments about it.
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rabodzey
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Member: Alex
Location: Cambridge, MA, USA
Reviews written: 68
Trusted by: 19 members
About Me:
I enjoy writing essays on various topics, especially if it helps people.
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