What Credit Card is Right for You? Pt. 2
In our last discussion, we looked at the most popular ways that credit card companies determine your finance charges. Now, let’s take a look at the fine print on some of the credit card offers you may be receiving in the mail.
The first thing that will jump out at you in most card offers is that fantastic introductory rate, most showing 0% interest on all purchases for the first “x” amount of months. Be careful and stop and take a look at the fine print. That great introductory rate that you have for the first couple of months won’t last forever. The first thing you will see, if you squint, is “Rates, Fees, and terms may change”, followed by:
We reserve the right to change the account terms (including APR) at any time for any reason, in addition to APR increases that may occur for failure to comply with the terms of your account.
This is what that paragraph states:
We reserve the right to change the account terms (including APR) at any time for any reason, in addition to APR increases that may occur for failure to comply with the terms of your account.
What does this mean to you? It means that the credit card company holds the right to alter the terms in your contract at any time. Your rate after the intro rate can often go as high as 30% +, that is if you get approved for your pre-approved offer.
When you receive a pre-approved offer in the mail, this does not mean that you are guaranteed to get the card they are advertising. Squint again at some great fine print:
This “prescreened” offer of credit is based on information in your credit report indicating that you meet certain criteria. This offer is not guaranteed if you do not meet our criteria.
This is what the above eye test specified:
This “prescreened” offer of credit is based on information in your credit report indicating that you meet certain criteria. This offer is not guaranteed if you do not meet our criteria.
The final fine print issue we would like to take a peek at is the extra fees and charges that may be possible on your credit card account. After reviewing a student credit card offer, I noticed the “other fees” section. These are thing that you want to be sure you look at, and be sure you are getting the best card that will fit your lifestyle. Here are some examples I found:
Foreign transaction fee: 3% of the amount of your transaction in U.S. dollars
Cash Advance: 4%, $10.00 minimum
Balance Transfer Fee: 3%, $5.00 minimum
Convenience Check Fee: 3% 5.00 minimum
Overdraft Protection Fee: $10.00 per occurrence
Cash Equivalence Fee: 4%, $20.00 minimum
Late Payment Fee: $15.00/$29.00/$39.00 (Late fee dependant upon balance)
Overlimit Fee: $35.00
All of the above charges can really sneak up on you, and that is exactly why we need to read the fine print. Always be sure to ask as many questions that you want when shopping for a credit card and be sure you find the one that will fit your lifestyle best. Join us for our next blog entry when we look at the credit card picture as a whole.
Don’t forget CFCU will always be here for our members and will be happy to answer any questions you may have on credit card fine print. Simply leave a comment or contact one of our convenient locations.
The first thing that will jump out at you in most card offers is that fantastic introductory rate, most showing 0% interest on all purchases for the first “x” amount of months. Be careful and stop and take a look at the fine print. That great introductory rate that you have for the first couple of months won’t last forever. The first thing you will see, if you squint, is “Rates, Fees, and terms may change”, followed by:
We reserve the right to change the account terms (including APR) at any time for any reason, in addition to APR increases that may occur for failure to comply with the terms of your account.
This is what that paragraph states:
We reserve the right to change the account terms (including APR) at any time for any reason, in addition to APR increases that may occur for failure to comply with the terms of your account.
What does this mean to you? It means that the credit card company holds the right to alter the terms in your contract at any time. Your rate after the intro rate can often go as high as 30% +, that is if you get approved for your pre-approved offer.
When you receive a pre-approved offer in the mail, this does not mean that you are guaranteed to get the card they are advertising. Squint again at some great fine print:
This “prescreened” offer of credit is based on information in your credit report indicating that you meet certain criteria. This offer is not guaranteed if you do not meet our criteria.
This is what the above eye test specified:
This “prescreened” offer of credit is based on information in your credit report indicating that you meet certain criteria. This offer is not guaranteed if you do not meet our criteria.
The final fine print issue we would like to take a peek at is the extra fees and charges that may be possible on your credit card account. After reviewing a student credit card offer, I noticed the “other fees” section. These are thing that you want to be sure you look at, and be sure you are getting the best card that will fit your lifestyle. Here are some examples I found:
Foreign transaction fee: 3% of the amount of your transaction in U.S. dollars
Cash Advance: 4%, $10.00 minimum
Balance Transfer Fee: 3%, $5.00 minimum
Convenience Check Fee: 3% 5.00 minimum
Overdraft Protection Fee: $10.00 per occurrence
Cash Equivalence Fee: 4%, $20.00 minimum
Late Payment Fee: $15.00/$29.00/$39.00 (Late fee dependant upon balance)
Overlimit Fee: $35.00
All of the above charges can really sneak up on you, and that is exactly why we need to read the fine print. Always be sure to ask as many questions that you want when shopping for a credit card and be sure you find the one that will fit your lifestyle best. Join us for our next blog entry when we look at the credit card picture as a whole.
Don’t forget CFCU will always be here for our members and will be happy to answer any questions you may have on credit card fine print. Simply leave a comment or contact one of our convenient locations.
posted by Creighton Federal Credit Union | 10:28 AM
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