WITH CREDIT CARDS, AS EVER, IF YOU SEE BAIT, LOOK FOR A TRAP
By Contributors: Jane Berryman, Jordan E. Goodman, Miriam A. Leuchter, Elizabeth M. MacDonald and Leslie N. Vreeland

(MONEY Magazine) – Received any slick, seductive credit-card offers lately? If not, you're one of the few. Card issuers are now accelerating a promotion blitz to sign up new customers, with enticing come-ons like ''No annual fee!'' and ''Skip your monthly payment!'' With so much noise, you might suspect a catch. You're right. Come Sept. 1, the Federal Reserve Board will require these issuers to make far fuller disclosure in their marketing. All mailings and brochures will have to state ''clearly and conspicuously'' the annual fee, the grace period, the annual percentage rate, the balance calculation method and all those nasty little extra nicks that are currently hidden in the fine print or are left out altogether. The card issuers are making the most of their final months of laissez-faire, though, by touting some of the best-sounding, worst-tasting deals in memory. Here are some pitches to avoid: -- The pitch: No annual fee! The hitch: Sounds great, until you learn that the annual fee is waived only for the first 12 months. Equitable Bank of Dover, Del., to cite just one of the many that employ this gimmick, advertises a no-annual-fee Visa that bills you $18 as soon as your second year begins. -- The pitch: No annual fee (continued)! The hitch: The Visa you get from First National Bank of Omaha really doesn't have an annual fee. Of course, it does have a $1.75 monthly fee for each month you use the card, meaning you will pay $21 a year if you use it regularly. But you could actually hold your fee to $0 -- all you have to do is never charge anything! -- No annual fee plus ''a powerful credit line!'' The hitch: It also has a sky-high interest rate. If you don't happen to have other accounts at First Deposit National Bank of Tilton, N.H., the bank tacks a 5.1% ''credit protection'' surcharge -- more or less insurance for the bank -- onto its 16.8% variable-rate card. That's an effective annual rate of 21.9% with no grace period. No wonder First Deposit can afford to waive the annual fee and give you a bigger credit line than other banks. -- The pitch: ''50 interest-free days . . . That's up to 50 days on us!'' The hitch: Sure, but you have to telescope all your purchases into the first few days of the monthly cycle. Household Bank of Salinas, Calif. has been hyping this feature, which in fact is available on every card with a 25-day grace period. Here's how it works if, say, your billing cycle ends on May 31. You rush right out the first week of June and charge another $500, which doesn't show up until the statement dated June 30. The 25-day grace period means you have until July 25 to pay without accruing interest charges. So you can go as long as 50 days without paying -- provided that you time your purchases with unerring precision. -- The pitch: A grace period if you open a certificate of deposit. The hitch: Skimpy CD rates. Customers of Arkansas Federal Savings of Little Rock who live outside the area, for instance, don't enjoy the 25-day grace period unless they deposit $200 in a one-year CD. But the CD yields a puny 2% -- compared with a recent national average of 9.38%. So you lose about $15 a year in CD interest, which helps explain why Arkansas Federal's card rate -- 11.88% -- is among the lowest in the country. The deal may be academic anyway: industry sources say the bank is denying 90% of new applicants. -- The pitch: Skip your monthly payment! The hitch: Citizens Bank of Providence, R.I. does let you forget to pay your bill up to four months a year. But don't assume that the bank will forget to dock you the 16% interest for those happy holidays. -- The pitch: Bonus Dollars you can use to buy items in the bank's catalogue. The hitch: At these prices, a bonus won't help. At Chase Manhattan in New York City, for example, you get 20 so-called Bonus Dollars for every $100 in purchases. But you have to fork over substantial real dollars for each purchase too -- sometimes more than it would cost you to buy the item directly. One recent Chase catalogue, for instance, listed a Panasonic video camera for as little as $1,099 in real dollars plus 351 Bonus Dollars that you ''earn'' by charging another $1,755 in real dollars on your card. Of course, you could get the same camera from a local discounter for only $1,075 without charging a red cent. -- The pitch: A lower interest rate in exchange for opening a checking account. The hitch: The $100 minimum checking account you open at AmSouth Bank of Birmingham, Ala. will knock three percentage points off your 17.66% rate but will cost you $72 in annual service fees. -- How can you avoid getting schnookered? ''Don't stray from the three basics,'' advises credit-card analyst Robert B. McKinley, editor of RAM Research's Bankcard Update in Frederick, Md. ''The three are a low rate, a full 25-day grace period and a decent $15 annual fee. The rest is window dressing.''