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Fine Print of Credit Card Applications

Nobody knows for sure how many credit cards are actually floating around in credit space. Credit space is my newly minted term for the aggregate number of credit cards actually issued.

Truth is, if you are average, you have eight credit cards so you occupy 8 parts of the universe now known as credit space. You also carry between ten and fifteen thousand dollars in credit card debt.

If this is true, you also are paying fees, charges and interest on this debt. Because these fees, charges, interest rates can vary drastically among credit card issuers it pays in real money to shop around.

Credit card offerings are made to seem like great deals. They are until you read the fine print and all of the disclosures. Here, along with an explanation, is what the law mandates be made clear to you during the application stage:

Annual percentage rate (APR)-The APR is a measure of the cost of credit, expressed as a yearly interest rate. Usually, the lower the APR, the better for you. Be sure to check the fine print to see if your offer has a time limit. Your APR could be much higher after the initial limited offer.

Grace period-This is the time between the date of the credit card charge and the date the company starts charging you interest.

Annual fees-Many credit card issuers charge an annual fee. The fees range from $15 to $55.

Transaction fees and other charges-Most creditors charge a fee if you don’t make a payment on time. Other common credit card fees include those for cash advances and going beyond the credit limit. Some credit cards charge a flat fee every month, whether you use your card or not.

Customer service-Customer service is something most people don’t consider, or appreciate, until there’s a problem. Look for a 24-hour toll-free telephone number. Your card is apt to be lost or stolen at 2 in the morning just as it is at noon. You will want to be able to notify your credit card issuer as soon as you learn your card is gone.

Other options-Creditors may offer other options for a price, including discounts, rebates and special merchandise offers. If your card is lost or stolen, federal law protects you from owing more than $50 per card-but only if you report that it was lost or stolen within two days of discovering the loss or theft. Paying for additional protection may not be a good value. In fact, buying credit card insurance is fool hardy and you are throwing good money after bad. If you follow the law and contact your credit card issuer in those two days, your only obligation would be $50 and often times the issuer will waive that $50 if you’ve been a good customer.

It is easy to get a credit card solicitation in the mail but it is hard to select the card that is right for you. The above information however should help in making an informed decision.

Comments (2)
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2 Existing Comments
  1. Mike said:
    on June 18th at 08:35 pm

    Almost nothing of this article is “fine print”. You should re-name it “credit card basics”.

    I came here thinking I would learn something new.

  2. zanya g. said:
    on April 19th at 11:22 pm

    Consumers were supposedly going to be protected by the 2009 CARD Act. The 2009 bill has provisions that are going into impact throughout this year. One provision of bill needs something simple. That credit cannot be issued unless the person getting the credit can prove that they can repay the obligation. The bill is causing some severe unintentional consequences, however. Stay-at-home spouses are very possibly going to be losing financial freedom, under the provisions of this bill. Here is the proof: CARD Act could strip say-at-home partners of financial identity.