Have you had a bankruptcy, foreclosure, or just a history of bad debt? If so, be careful because there are lots of unscrupulous lenders and other predatory companies that will try to take advantage of you.
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 2015: Horizon is NOT a real credit card. Instead, it is an account you can only use at once place (their website) to buy merchandise. This is absolutely the worst, most predatory kind of card to have. In total, the fees for the card can run as much as $300 or more per year, which is truly 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.
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
- Bad credit – OK
- Fast online application
- No employment check
- Reports to major bureau
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. You’re being sold a bill of goods, none of which is good.
How it really works…
1. This is an online retailer, not a bank or a regular credit card issuer
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 type of financial 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 their twisted business model more difficult to get by the authorities that govern real banks.
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. Convenient for them, anyway!
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 confused as to 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. Oh, and cancel the card while you have them on the phone.
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 may help. Maybe. 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 complete ripoff just to get another account for your credit report. There are much less expensive options available, 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 one 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? Perhaps, but it’s not illegal. So it’s not technically a “scam” but rather just an extremely overpriced credit account designed to take advantage of those without other options. Not to mention that it also 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. Just walk away. If you already have one, cancel it as soon as you can. 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. Then you can get a real credit card that can be used anywhere – just use it responsibly and you can grow your credit over time.