The fine print of a good credit card offer

How "subject to change" is your credit card? If you find yourself answering with a perplexed "I don’t know," then perhaps it is time to remember the facts about fine print.

No one wants to read fine print. That may even be in the fine print somewhere. The average person simply does not understand all the technical terms and legal jargon that credit card companies throw out there for us to read. Thus, people often end up skipping over the fine print altogether. The problem is that the fine print holds on the extra details, even for the best credit card offers. You need to know what the fine print is there to tell you, even if it can be difficult to comprehend.

Credit cards are not just free money. Even top credit card offers are not just dishing out a piece of plastic without any applicable rules. Yes, you know the general idea; you get a credit card and pay back your balance either in increments or in full each time. No big deal right? It can be.

A credit card is a financial agreement between you and the credit card company. Just because the credit card application was much faster and easier to fill out than an application for a loan or the paperwork for buying a car does not make it any less serious. Neglecting to check out the fine print can mean you will pay extra in fees, penalties, and interest – not something you were bargaining for.

Whether you are about to fill out a credit card application or already own a credit card, always know that your credit card terms are subject to change. You may look at a credit card offer and see that the company claims the rate is fixed at a certain annual percentage rate. Not always true. After all, it is the credit card company’s product – they can do what they want to it, within reason of course, and sometimes they will do just that.

You will find the fine print on the information the credit card offer will give you along with the application form, or you can also check your credit card statements to make sure you are aware of any changes the credit card company has decided to make. This way you can keep on track and decide to stop your credit card use before the interest suddenly leaps up or to keep yourself fee free. Poking around in the fine print can yield up some very interesting information.

1. APR (Annual Percentage Rate): There it is – your new APR in big, fat, black print. You could have 0.00 percent! That would be nice – if it were true. Credit card companies get nothing if they were to give people that kind of APR all the time.
   You will usually see this low rate on balance transfer credit card offers, but unless you get extremely lucky, this rate will transform into a new one after a set amount of time. If you owe $14,000, you are not likely to pay it off in 6 months. Take a good look at the fine print to make sure your interest rate will not jump to something much, much higher after the introductory period or if you are late with your payments. A 7.99 percent is quite nice thse days, but a late payment can kick it up to 14.99 or even higher if you are not careful.
2. Fees – Beware the copious amount of fees credit card companies attach to their credit cards. There are fees for just about everything you could imagine; if you are late on a payment, do not use your card for a certain period of time, basic annual fees, failing to pay your balance, for exceeding your credit card’s limit, obtaining a cash advance, getting overdraft protection, and yes, even fees on that wonderful balance transfer credit card offer; a fee just to transfer the balance. Many fees lurk in the dark until you do something to trigger them, so know what your specific credit card fees will be, and carefully make your way through your purchases and payments so you do not trip them.
3. Grace Period – How long do you have before you must pay off your credit card balance before the interest is charged? 20 days? More? Less? Sometimes these lengths can be changed and you may be unaware of it. Pay close attention to when your payments and balance are due to help avoid the interest – especially if it is high.
4. Credit Limits – Depending upon your credit history and how you are handling your current credit card, credit card companies may give you a different credit limit than what you applied for. A good credit score will help to persuade them to give you a higher limit and low rates because it shows you can handle a credit card.

The fine print holds a great deal about your credit card or the credit card offer you are considering. Be sure to examine it all and know which rates you will receive and what fees you could possibly fall into. This can help you compare credit card offers and choose the right credit card for you.