Credit Card Terms: What Lies Beneath the Fine Print

When you choose a credit card, whether online or offline, you look through quite a number of offers. And of course, you pay attention to highlights and every card's basic features. That is quite natural. If you decide to read all deals' terms and conditions, you will probably make your choice in a year or so.

However, applying for a credit card having read just its most attractive options that are the most striking can cause an aftergrowth. When you narrowed your range of credit cards you consider applying for to 2 or 3, study cards' details more thoroughly. Otherwise, you can face some really unpleasant surprises after activating the card.

Here are some of the unexpected things you can find out only after you read the fine print.

• No grace period (it usually lasts from 20 to 30 days and during this period you can pay off your balance without any interest charges). Even best credit cards can have no grace period. Not to mention less favorable deals for bad credit, for instance, that can have a much shorter grace period or even no grace period at all.

• Balance transfer fee. Balance transfer cards are a great option for card holders who want to eliminate their debts. Especially if the offer comes with a long 0% interest introductory period. It allows you to pay off the transferred balances without incurring interest. But there is one nuance that not every credit consumer pays attention to. Nearly all offers have a balance transfer fee that makes up 3% or 5%. So, you should keep this in mind when getting a credit card for balance transfers.

• Interest rate hikes. Your credit card company reserves the right to change your credit card interest charges, even if it is a fixed APR, and other credit card terms. But they are obliged to send you a two week's notification. So, read your monthly credit card statements. There you will find the updates to your plastic's terms and conditions.
• Minimum payments. You will find in every credit card agreement the minimum amount of money you are to pay off every month. Creditors do not force you to make larger payments. But in fact, making just minimum payments you accrue extra fees and interest charges to your balance. Paying the agreed minimum, you just extend your credit card debt.

• Universal default. When you examine any credit card offer, you can see credit penalties and default rates that you can be charged under certain circumstances. You can find the cases when you can get a penalty fee in your credit card agreement. But there are cases when your lender can apply the universal default clause to your credit card, if you are late not with your credit card payments, but even with your car or house loan payments.

These are a few of credit card pitfalls you can stumble over. But if you are financially literate and carefully read the documentation associated with your credit card terms, you will easily avoid all the traps.