Millions of United States consumers lose money due to their inability to either read or understand details pertaining to their credit cards in small print. Whether it’s a credit card agreement, purchase agreement or other contract details, the bulk of Americans will only skim through the document rather than take a while to read and ensure to have understood all aspects of the agreement.
Credit cards small print hold a lot in detail which many do not understand and when they do, it’s too late, they’ve already signed the dotted line.
Here’s to helping you understand what might be in the small print next time you’re about to sign up to a credit card:
For consumers who’d prefer to choose between a pool of cards, interest rates are a tricky part of the game. Before dashing out to that card which seems to charge the lowest interest, always have a look at the small print.
Interest free days are often used to entice consumers but these interest free days may not be applicable to you in every situation, for example, when a $3,000 spending requirement within the first month in charge is required to qualify.
Most credit card issuers will charge you higher interest when you pay late – in some cases, this interest might be 2 or 3 times higher than the usual. The small print will also tell you for how long such higher interest is applicable.
In highlight, a credit card offers you lots of freebies but in small print, you’ll never be eligible these rewards. Card rewards such as extended warranty and purchase protection may require you to register goods purchased within 30 days in other to be eligible in future.
In other cases, you might end up losing all rewards if you pay late or go over the limit. It’s never advisable to increase spending for sakes of an enticing rewards program. You might end up spending more than you can pay for and will surely regret your spending spree.
Foreign Transactions fee
How much does your credit card charge when you’re out of the country?
A foreign transactions fee applies whenever you purchase items in currency that’s not your home currency (in this case the U.S. $Dollar). Some credit cards charge a fixed amount while others will charge a percentage of all foreign transactions.
Balance Transfers and Cash Advances
Happy to say it, balance transfers let you skip out on any high interests your credit card may be charging you. Most card issuers place restrictions on cards you can transfer from or transfer to. In a few cases, balance transfers are only possible when with a card of the same issuer.
Late Payment fees
The small print doesn’t care if you forgot or deliberately decided to pay late. In order to cut out more money from your pocket, card issuers will include clauses that charge you a certain amount whenever you pay after the due date. Some agreements will include clauses making it at the sole discretion of the card issuer to increase your interest whenever you pay late.
Over the Limit fees
Have you ever wondered why on reaching your limit, a credit card doesn’t just stop you from making further purchases?
Small prints are known to harbor clauses which could have detrimental effects on your finance when you go over the limit. This usually includes higher interests on all transactions carried out within the current billing period and an over the limit fee.
Always remember, exceeding your limit even by a dollar is likely to come with a penalty.
Although very unlikely to be revealed in highlight, the small print will reveal to you where your balance repayments are going to. On most cards, balance repayments go to those transactions charging very low interest. For example, if you transfer $1,000 unto your card and have made $1,000 in purchases, your paying $1,000 as balance repayment will most likely go to the balance transfer charging lower interest than purchases.
Reading and Understanding your credit card small print might require the help of a magnifying glass, but the short and long term benefits of knowing what’s in the small print could save you hundreds of dollars every year.