What Is in the Fine Print of Credit Card Offers?

What Is in the Fine Print of Credit Card Offers?
(Justin Sullivan/Getty Images)
Anne Johnson
Everyone has an angle, and credit card offers are no different. Credit cards are in business to loan your money with the idea that you'll pay more back than what you borrowed.
Many credit card companies make great offers to switch to them, but have bad deals in the fine print. But what kind of offers are these companies making? And what should you look for in the fine print?

Where Is the Credit Card Fine Print?

Start by reading the application to find the credit card’s fine print. It will give you an introduction to the requirements and restrictions. Don’t overlook this important information. You might have to go to the card’s website. It’s listed under terms and conditions.
If you already have the credit card, read the terms and conditions. Look at the standardized Schumer box at the top-right corner of your monthly credit card statement. It will tell you the rates and fees.
Rewards programs might be listed lower on the form or the credit card company’s website.

Review the Annual Fee

Many credit cards have annual fees. Some cards waived the fee the first year, but it’s looming over you on your anniversary date. A large annual fee could eat away at any rewards you’ll earn.
You could cancel before your anniversary date if you don’t want the credit card because the fee is too high. But read the fine print: some credit cards retroactively take back intro reward offers if you close the account within the first 12 months.

What Is the Purchase APR?

The credit card’s annual percentage rate (APR) determines how much interest you’ll pay on the purchase balance.
If you carry over a balance, you’ll start to accrue interest until you’ve paid off your card.
Interest will automatically change based on the prime rate if your card has a variable APR. If interest rates are rising and you carry a balance, your credit card could cost you a lot.

What Are Cash Advance APR and Rules?

You may have a different interest rate if you take a cash advance. This interest rate is higher than a card’s usual interest rate. It applies to cash advances immediately, even if you’ve paid your balance in full.
Determine what your card considers a cash advance. There are three ways a credit card may determine a cash advance:
  • ATM withdrawal
  • buying cryptocurrencies
  • peer-to-peer money transfers
Ensure you read the fine print to determine what a cash advance is and whether you’ll be paying a higher interest rate for taking one.

Penalty APR May Apply

You may be subject to a higher APR if you miss a payment. The new higher APR will apply to new purchases. However, if you fall behind 60 days, the APR penalty will apply to all balances.

Introductory APR Offers

The big draw with credit cards is their introductory offers. You’ll receive an introductory APR on your balance transfers and your purchases.

For example, credit card companies offer a zero percent balance transfer for the first 60 days of opening a card.

But, on some cards, the new APR is available for the transferred balance but not new purchases. Your new purchases might immediately start accruing interest at the higher rate.

Watch Deferred Interest Offers for Transferring Balances

This one is a little sneaky and is often found with store cards. The deferred card might offer you a zero percent interest rate on your transferred balance, but not quite.

When transferring a balance to a deferred card, if you don’t pay off your remaining balance by the end of the promotional period, you will be charged all the retroactive interest accrued since you opened the card.

That could give your balance a big bump, fast with high-interest rates

Balance-Transfer Fees Add Up

A balance transfer generally has a fee, often 3–5 percent of the amount being transferred. Ensure you review the terms so you know what you'll be charged.
Before you transfer your balance, you should compare the amount you‘ll save in interest to the amount you’ll pay in fees.

Miscellaneous Fees That Occur

Annual, balance transfer, and foreign transaction fees are usually included in the Schumer box, but some are omitted.
There could be charges for requesting a physical copy of your bill. Making payments on the phone sometimes requires a fee as well.

Learn Definition of Rewards

There are four standard reward categories:
  • travel
  • dining
  • gas
  • groceries
However, some cardholders have different definitions of each category.
For example, a card’s rewards may only cover travel that focuses on airfare, rental cars, cruises, hotels, and motels.
But some cards say taxis, parking garages, and campgrounds as part of their travel rewards.
There are sometimes exclusions like purchases at non-U.S. merchants or gas at a supermarket gas station or warehouse club. Particular retailers may be excluded.
Read the fine print of your rewards to ensure that your activities or purchases are covered under the credit card’s rewards.

Variable Rates Can Hurt

Although most mortgage rates are fixed, many credit card rates are not. Ensure you read the fine print before you open a credit card and learn whether you'll have a variable rate. If you do, it could increase if the prime rate increases.
Even if your card is advertised as a fixed rate, it may be fixed for only 12 months. Your rate may increase after 12 months. When an interest rate changes, you are given 45 days’ notice.
The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
Anne Johnson was a commercial property & casualty insurance agent for nine years. She was also licensed in health and life insurance. Anne went on to own an advertising agency where she worked with businesses. She has been writing about personal finance for ten years.
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