By John Campbell
Before you ever sign up for a credit card you should read the disclosure box at the bottom of the credit card application. The information you read in the disclosure could change your mind about whether or not you even want the card.
Even if you’ve been pre-approved for a credit card you need to check out all of the terms and conditions associated with the offer. You may find out that you don’t even qualify for the teaser rates or size of credit line advertised in the original offer.
As a general rule of thumb, the smaller the print is the more important the information will be. If you can barely read the disclosure box chances are it contains some vital information the credit card company is hoping you’ll overlook. Putting the terms and conditions in fine print is a standard practice for many credit card companies.
The less you know about the true costs of using a credit card, the more money credit card companies can suck from you before you even know what hit you. And they do get a lot of money from consumers. In 2003 alone, the U.S. credit card industry earned an estimated $30 billion in profit.
The most important things to look for on a credit card application are any annual fees, the annual percentage rate (APR) and the grace period for purchases. If these three vital facts are missing from your credit card application, toss it in the garbage.
Unless your credit is very bad you should qualify for a credit card with no annual fees. Beware of cards that charge annual fees unless you have no other alternative.
You may also want to compare the APRs on various credit card offers. Some credit card companies offer very low introductory rates as low as 0 percent APR. These rates automatically switch to a higher rate after a set period of time. If you’re interested in a card with a low introductory APR make sure the percentage increase won’t be too drastic. Most credit cards may have anywhere from 9 - 15.9 percent APR for purchases. Your credit score may determine if you’re eligible for cards with lower rates.
In regards to the listed grace period on a credit card application, the best cards will offer no less than a 25 day grace period on interest charges if you pay your balance in full each month. If the grace period is less you’ll end up spending more in interest each month than is really necessary.
As always, shop around for the best credit card deals out there. There is still a lot of competition amongst the various companies in this multi-billion dollar a year industry. If you read all the terms and conditions for each card you’re interested in you’ll be able to make an informed decision and choose the card that is best for you.
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John Campbell is the writer and editor of CashBuzz, A financial portal for the rest of us. Check out cashbuzz.com for the latest articles on money management and tips and tricks that can help improve your finances. This article may be reprinted on your Web site if the copyright, author information and active link are included.
