Credit Card Terms And Conditions – A Closer Look

It’s sad but today most credit card companies are devious and
they’ve designed everything possible into the fine print of
their terms of service to catch you Therefore, when looking at
any credit card offer, make sure you take a close look at the
fine print

Believe me, I am fully aware that it’s purposely put together to
appear like a maze, but because it’s so vitally important to
your financial well-being and with the current trend towards
“relatively” easier-to-read summary boxes you no longer have a
legitimate excuse for ignoring the terms of service

That being said, I’ve outlined a few of the key aspects to look
for that are normally “hidden” away in the fine print of most
credit card offers

The Annual Fee Although it’s not as common as it once was, it’s
still around Especially, on the so-called higher status Gold
and Platinum cards which still tend to charge much higher fees
than the “basic” credit card Annual fees are simply an easy way
to get another $3995 to $7995 or more from each and every
customer It may not sound like much but it adds up when you’ve
got millions of customers If you give the company a call you
can normally get it waived and if they won’t then don’t take out
the card or cancel the one you’ve got – it’s the principle of it

Late Payment Fees and Penalty Charges Cash advance fees, late
payment charges and exceeding your credit limit are the types of
fees you need to pay attention to when checking out the fine
print Many cards have unjustifiably high fees and if they do
you shouldn’t sign up for them Just say no!

Calculating Interest Because it’s so hard to understand (they
make it that way on purpose) this is often one of the most
overlooked, yet important aspects hidden away in the fine print
There are basically three methods being used to calculate
interest on your balances

Adjusted Balance Not as common as it once was but some companies
are still using it In a nutshell, you are charged interest on
whatever your balance was on the day the company sent you the
bill

Previous Balance Basically, this method is simply a horse of a
different color In this version you are charged interest on
your balance as it stood at the end of the previous billing
cycle regardless of how much you’ve spent or paid off since
Some consider this a tad bit easier to understand

Average Daily Balance Last but certainly not least This method
is currently the most common and it’s also the most complicated
Using this method your balance is added up at the end of each
day in the billing cycle, it’s then divided by number of days
that have transpired in that billing cycle and interest is
charged in this amount I know, clear as mud

If your balance jumps around this method may be slightly better
for you than the other methods because it keeps you from paying
full interest on a balance that just happened to be large on the
billing date

You should also be paying attention to the monthly rate of
interest rather than just relying on the APR APR is an estimate
of the total cost of borrowing but it’s the monthly interest
plus the various fees and charge that will show you exactly how
much you are paying

Grace Period This is extremely important for about 40% of all
credit card holders because that’s the approximate number of
people who pay off their balances each month It’s also
important for the remaining 60% because then you can avoid
interest on new purchases for the first 30 days or so As a
result, make sure that the card you’re looking at has a grace
period on purchases; otherwise, you could end up being charged
interest from the moment you buy something On the other hand,
virtually no credit card company offers a card with a grace
period on cash advances or credit card checks

Currency Conversion Fees This only applies if you plan on using
a card outside the country If it does apply to you, take a look
at what you’ll be charged for transactions made in other
currencies Some cards are much more expensive than others

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