How to spot scams in promotional offers
Banks and credit card companies often use promotional offers; it's not uncommon to receive an email offering a cash incentive for opening a new checking account or a mailer for reward points if you sign up for a certain credit card.
When considering these offers, it’s important to take the time to safeguard your personal information in the process. Here are some red flags to look out for, along with tips on what to do if you want to take advantage of a promotion.
Watch out for common warning signs
Fraudsters can create deceptive emails or mailers that promise lucrative promotions, so take a careful look at any offer before handing over sensitive information, like your Social Security number or account numbers. Common warning signs of a financial scam include:
- Emails requesting sensitive information. Banks and financial institutions will never ask you to send your personal information or passwords by email.
- Misspelled domain names, websites, and company names. Look out for printed or email promotions that misspell the name of the financial institution, the website, or the domain name after the “at” (@) sign in the sender’s email address. What looks like an innocent typo can actually be a sign of fraud.
- Requirements for up-front payment. If you receive a promotional offer for a financial product or service, like an advance on a loan or a new line of credit, and it requires a payment first, it could be a scam.
- Extreme urgency. While promotions from a bank or credit card company may be available for only a limited time, you usually have some breathing room to consider the offer. Any promotion that requires you to sign up immediately is a major red flag.
- Unknown sender. If you don’t recognize the name of the bank or credit card company that sent the promotion, do some research to make sure it’s legitimate and trustworthy.
It's best to avoid responding to any promotion that seems suspicious. If you just can't say no, call the bank or credit card company behind the promotion to verify it. When you contact the financial institution, make sure you use the phone number listed on the company’s official website, on the back of your credit card or debit card, or on your bank statement—not the one listed on the offer itself.
Read the fine print
Once you’ve determined a promotional offer is legitimate, you’ll need to figure out if it’s right for you.
First, research whether it’s truly a competitive offer. You may find even better offers than the one you received by doing a little online research.
Next, carefully read the fine print of any offer before signing up. You may not receive the promotional benefit if you don’t meet certain requirements, such as:
- Keeping a new account open for a certain period of time.
- Spending a minimum amount on a new credit card during the promotion period.
- Setting up direct deposit from an employer into a new checking account.
Be sure to read the details in the terms and conditions and understand all possible fees (such as late-payment fees and annual fees) and interest rates (including limited-time introductory rates and the APR). It can also be helpful to assess other benefits of the offer, such as purchase protection policies, opportunities to earn cash back and reward points, and travel perks.
Finally, consider your broader financial situation to see how the new offer might fit in. If you already have several checking accounts, it might not be the best idea to open a new one just to take advantage of a cash bonus. On the other hand, if you’re already looking for a new credit card, it might make a lot of sense to jump on an offer for one with a welcome bonus or extra rewards points.
Signing up and receiving the bonus
If you decide to take advantage of a promotional offer, make sure you sign up through an official channel.
You should always double check links in emails and messages to ensure it’s from the source you’d expect before entering sensitive information. Also make sure the URL begins with https:// (not just http://) so that you can be confident your information is sent securely.
After you’ve submitted your information and received an official approval, create a plan for how you’ll meet the promotion's requirements. You may need to start making purchases on a new credit card right away in order to meet a minimum spend threshold to receive a welcome offer. If you need to set up direct deposit on a new checking account to earn a cash bonus, you may need to submit a form to your HR department.
The bottom line: Promotions from credit card companies and banks can be a great way to earn cash bonuses and reward points. Before sharing your personal information, make sure the offer comes from a legitimate source and makes sense for your situation. You may also need to meet certain requirements before you receive a welcome bonus or other offer.
