Have you had a bankruptcy, foreclosure, or just a history of bad debt? If so, be careful because there are vultures who love to take advantage of people in your situation.
A prime example is the Horizon Gold card. If you currently have an account or you’re thinking about getting one, this review is a must-read.
Quick Overview for 2013: Horizon is NOT a real credit card. Instead, it is an account you can only use at once place (their website) to buy merchandise. In total, the fees for the card can run as much as $300 or more per year which is outrageous. They even say this on their website, here’s the fine print disclosure:
If you have bad credit, you would be much better off getting a major credit card (like a MasterCard) that you can use for purchases everywhere. Here is one I highly recommend for bad credit:Alternately, you may want to try this out and see if you are matched for any offers…When you go to the homepage for Horizon card services, you are taken to a sales pitch for it. In big bold red font they tell you it’s possible to get:
- $500 limit
- Guaranteed approval
- No credit check
- Fast online application
- No employment check
- Reports to major bureau
- Bad credit – OK
That sounds almost too good to be true, right? Well that’s because this is not a bank and you’re not getting a traditional credit card.
How it really works…
1. This is an online retailer, not a bank
At the top of the page is the “pre-acceptance disclosure” and if you scroll through it (which is difficult to do by the way, since they only show 4 lines of text at a time) you will see for yourself who’s actually behind the so called Gold card:
(blue highlight added by me)
That’s right, this is not a bank, credit card company, or any other other credit services organization. What the Horizon Gold card offers you is merely a line of credit to shop at their own website, called Horizon Outlet (which I’ll discuss in a moment).
This is NOT a Visa, MasterCard, Discover or American Express. You can only use this card for shopping from their online catalog/store.
2. The plan costs $24.95 per month (that’s almost $300 per year!)
They don’t charge interest, instead they just charge you a bunch of fees and sell you overpriced merchandise.
My guess is that the reason they don’t charge interest is because if they did, it would probably expose them to various credit card regulations. And since they’re not an actual bank, that might make this business model difficult for them to pull off.
Instead, it seems they skirt around by charging you a monthly “membership/benefits plan” of $29.95 per month:
You get automatically enrolled in this upon activation. They say for “ease and convenience” the $24.95 will be auto-debited monthly from your checking or bank account on file. Hmm… doesn’t sound very convenient to me!
Keep in mind that $24.95 per month is a whopping $299.40 per year! But wait, there’s more…
3. Fees, fees, and more fees
As if paying almost $300 per year for the card wasn’t bad enough, there is a laundry list of other fees and charges which you might experience while using the account:
- One time Card Issuance and Account Validation fee: $5.00
- Fee for returned checks or debits, second NSF: $25.00
- Outlet Store Residential Delivery: $2.00
- Outlet Store Delivery Signature Verification: $2.50
- Monthly maintenance fee: $6.00 (waived to all active Horizon Card Services members).
Even after I read all 5,000+ words of the “pre acceptance disclosure” I’m still fuzzy about when/if each of these fees is charged. If you already have an account with them, call up their customer service (the phone number is 1-800-251-6144) to find out so you don’t get hit with them unexpectedly.
4. It’s not guaranteed to show on your credit report
The reason a lot of people with bad credit will pay for things like this is because they want to get a fresh start with re-building.
Well, if you’re counting on the Horizon Gold credit card to do the trick. it might help out. But make sure you read this fine print on the application:
As you see right there, they clearly say they do not guarantee “the posting of any positive references to any credit report.” Now in their defense, rumor has it that they do report the account to TransUnion (and then after a few months, the other two credit bureaus Equifax and Experian will pick it up after seeing it on TransUnion).
But the fact remains that paying almost $300 per year for the “membership plan,” not to mention all the other fees, is a ripoff price to pay just to get another account for your credit report. There are much cheaper options elsewhere, which I’ll discuss in a minute.
5. The merchandise is insanely overpriced
Personally, I can’t access their shopping site, called “Horizon Outlet,” because in order to see the products you need enter your Horizon card number.
But based on the reviews and feedback I’ve seen posted on the net, their merchandise sounds like it has ripoff prices. Here’s what a purported customer alleged in a forum post:
Of course I have no way of verifying the accuracy of his or her claims, but it does sound comparable to what a number of people say about this company.
What should you do?
You will see many complaints posted online where people allege that the Horizon card is a scam or fraud. Technically speaking, it isn’t. There’s nothing illegal about what this company is doing. Immoral? Yes! But it’s not illegal. So it’s not a “scam” but rather just an excessively overpriced credit account, that has very limited use.
When compared to “real” bank-issued credit cards for bad credit, I see little reason why you would get this quasi credit card from Horizon Gold. Even the most overpriced cards from an unscrupulous bank like First Premier will still probably end up costing you less than this.
But the best option for you is to get a secured credit card. With those, you put up a security deposit which is fully refundable when you close the account (assuming you don’t have any outstanding obligations on the account).
My recommendation? If you wanted to apply for the Horizon card, don’t do it. If you already have one, cancel it. Instead, try out this sponsored tool to see if there are any credit card offers you are pre-selected for. Click below, fill out the form, and see your results.
This article was written or last updated November 11, 2013