Credit Card Traps To Avoid
It\’s understandable that such a thing as picking the best credit card could be difficult with so many offers in the market. The new credit CARD law was created to protect consumers against unexpected changes in the terms and conditions. So what the credit card issuers did was to make their offers more attractive to the consumers. In this post, we talk about the most common credit card traps that consumers must watch out for:
Words or phrases that are not precise
Credit card deals may sound attractive at first. But when you read \”up to\” or \”as low as\” phrases you should understand what the deal really means. It is very likely that you will get \’up to 5% rebates\’ or \’1% interest rate on purchases\’ and you would find that very enticing. You absolutely must read the fine prints because there you will discover that your great deal may not be so great after all.
\”Up to\” and \”as low as\” are conditional phrases. Those phrases involve certain conditions that you have to comply with before you could enjoy the deal. You may discover that in order to qualify, you must purchase from affiliated merchants. At first glance it looks great but wait \’til you find out that those affiliated shops are high-end shops selling very expensive goods!
Strict rules on rewards Because many reward cards are competing for the same market, many issuers make their rewards even bigger to attract customers. But these issuers find subtle ways to get back what they give. How? Many reward today impose blackout dates. This expiration period is usually short. Furthermore, there is also a deadline for redeeming the rewards. Even the rules on reward points collection have become more strict such that the consumers can\’t claim them at all. Most consumers end up empty-handed because they have imposed even stricter rules on collecting the reward points.
Unreasonable fees. The 0% interest rate offers on credit cards are great, too, but what about the other fees? If you want to consolidate your debts, for example, you can transfer credit balances with zero percent introductory rate. But take a look at the fees you have to pay each time you make a balance transfer; it could be as high as 5% of the balance being transferred! Can you imagine what a 5%-charge mean for your finances? Before signing up, consider this: will the transaction fees defeat my purpose for acquiring with 0% APR?
And you thought perks were free! If you want a reward credit card, be sure to examine the interest rates and fees. After considering the fees, turn to the rules of the reward program. It\’s all in the fine prints; read them several times if you have to. A good example is, what you think are free perks might not be so – you may have to pay for some services!
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