How to Avoid Credit Card Traps

How to Avoid Credit Card Traps

When in search for a credit card, you will be confronted with a lot of choices. And with so many options available, selecting the best one can be tough. The new credit CARD law was created to protect consumers against unexpected changes in the terms and conditions. However, the new law does not prevent credit card issuers from making their offers more enticing to the public. In this post, we talk about the most common credit card traps that consumers must watch out for:
Indistinct words or phrases.
Credit card deals may sound attractive at first. But if it includes the phrase "up to" or "as low as", you should take a closer look at what the deal truly entails. Perhaps you see reward credit cards that offer "up to" 5% rebates or "as low as" 1% interest rate on purchases. Sounds like a great deal? Check the fine print and you'll see that maybe it's not so great after all.
Phrases like "up to" and "as low as" are often conditional. For instance, you can earn the maximum 5% rebates or enjoy "as low as" 1% interest rate but only if the conditions stated in your contract are met. You may discover that in order to qualify, you must purchase from affiliated merchants. Upon closer look, these affiliated merchants could turn out to be high-end shops that only sell expensive goods.
Stringent rules on giving rewards.
Because many reward cards are competing for the same market, many issuers make their rewards even bigger to attract customers. But these issuers find subtle ways to get back what they give. How? Many reward today impose blackout dates. Some reward cards have shorter expiration period as well so you can easily lose your points if you fail to redeem them on time. The rules on collecting reward points may have also become more rigid, making it difficult for the cardholder to get rewarded.
Unreasonable fees.
Credit cards with zero percent interest rate offers can seem to be the most amazing thing. However, don't forget to check out the rest of the fees. For instance, some balance transfer credit with zero introductory rate can be used for consolidation. But how much would you pay each time you want to transfer a balance from another card? Some cards impose as high as 5% of the balance being transferred. Imagine paying 5% charge each time you need to make a transfer. Before signing up, consider this: will the transaction fees defeat my purpose for acquiring with 0% APR?
Perks are not free after all.
If you want a reward credit card, be sure to examine the interest rates and fees. Next, understand the rules of the reward program to make sure it fits your lifestyle. Read the fine print and pay special attention to details. For instance, most credit with rewards offer various perks and privileges for their holders. However, not all perks may come for free. You may need to pay for some services if you choose to get them