Credit Cards Gotchas: The Case of the Fine Prints

By Leni Parrish on October 29, 2010

Credit cards are one of our great responsibilities in life. With credit history or not, they are always available.

For instance, with too high interest rates, consumers get a burdened too much that they need to consolidate. How? They just need to do a balance transfer to a low interest credit card. Other balance transfer cards offer zero interest rates for a certain period of time. That is a very tempting offer. Some may be thinking about it as free money. But here’s the catch: the zero percent is charged to the transferred credit. If you have transferred $10,000 credit to another credit card, you will be paying no interest for that. But if you bought an item worth, let’s say, $250 within the charge-free period, you will be getting a bill with an interest on it after the period ends.

Cash-reward credit cards look very enticing, too. With 5% cash-back, reward? Who wouldn’t want their money to come back? Just be careful, though. See their grace period, rewards rate and APR? Looked like you have seen a good bundle, right? Wait for a few months. Something changed? You may notice or not that the grace period of your account shortened, rewards rate fell and APR increased. The credit card company has a right to do this actually. Read the terms included with your card.

Again and again, experts and even the federal government kept repeating that customers should read the fine print written in the terms and conditions included with the credit card or through online. This is why people usually go to complaints center and voice out that they have been robbed by their credit card companies. Credit card companies are very smart. They can make tempting offers only to lure them into something else.

They have no choice actually, customers are defaulting and they lose money, too. That’s why they get back at customers so they could recover money they have given up due to the defaults. Well, that’s just a minor reason, anyway. The main reason why they give sweet offers and end them abruptly later on is that they are enterprises. Enterprises exist for profit. Just like other businesses do. It’s not pointing solely at customers, too. No, it’s not entirely the customers’ fault, though they have to share the blame, too. Being an educated borrower pays a lot. The fine print is so boring and they are tiny to be read, but this is the terms of the contract. Like other legal contracts, entire content must be read.

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