Can you say that you’ve honestly read your entire credit card agreement? With the number of pages and insanely tiny print, reading through the fine print seems awfully similar to reading the dictionary. But by just putting your John Hancock on paper, you could very well be agreeing to something you might not be aware of. In fact, a recent survey showed that a third of bank customers had a limited understanding of credit card offerings -- even after speaking with a representative. And that’s scary!
In order to help you avoid some unfortunate circumstances, here are a few things you should look for in your document so that you’re not left in the dark:
- Variable rates: You aren’t bound by the rate you signed up for. In fact, over 70 percent of credit card agreements have variable interest rates that parallel bank’s benchmark prime rates.
- Credit protection: Sometimes referred to as “payment protection”, don’t budge if you are offered credit card protection. More often than not, these agreements will hardly benefit you, even if you end up with a successful claim. Be sure to opt out of these offers to avoid any of these expensive policies.
- Arbitration requirement: Simply put, if your arbitration is “binding”, this means that you won’t take the card issuer to court over a dispute. Sometimes you can choose arbitration afterwards if you and your card issuer come to a dispute. You should just be aware that this “escape hatch” exists.
- Monthly maintenance fee: Oftentimes, credit cards charge a monthly fee, disguising them in the ‘payments’ section of your bill. If you’re one of the lucky few, a credit card issuer may waive the fee for the first year, then add it after. Be mindful of these fees when they pop up.
