Although most consumers use credit cards today, many of us do not pay attention to the credit card terms and conditions or the other forms of “fine print” that accompany credit agreements. Do you ever read all of the fine print when you receive a credit card offer in the mail? Do you pay attention to a change in terms on an existing account? If you don’t, you could be missing some very vital information that may impact your credit at some point down the line. Consumer credit issues can arise if consumers do not educate themselves on credit card terms and conditions BEFORE they start to use them.
Many consumers have already found themselves in a situation of mounting credit card debt. They feel as if they are in a downward spiral because they continue to incur late fees and penalty fees on top of their already existing debt. A big part of this disaster might be caused by not understanding basic credit card terms like interest rates, credit limits, etc. Fortunately, there are consumer credit counseling services to help them pay off debt and get back on the right financial track.
When you decide to get a new credit card, look at the terms and conditions and ask yourself these questions:
In the world of consumer credit, the Cardholder Agreement is a legally binding document between the consumer and the credit issuer that outlines, in detail, all of the credit card terms and conditions. When you “sign on the dotted line” and accept a credit card agreement, you are also accepting the terms and conditions that come along with it. You are responsible for everything that is written in fine print, whether or not it is easy to understand.
Most of us receive credit card solicitations by mail, and it can be hard to compare one offer to the next to decide which one will best meet our needs. Now included by law on every credit solicitation, you will find a section called the “Schumer Box” – an abbreviated listing of the most important pricing terms for that account. This legislation was passed in March 2004 to aid consumers in understanding key elements of a credit card solicitation. It includes such items as rates, fees and penalties. Know the definitions of these words. Various websites, such as bankrate.com, will allow you to quickly compare credit card terms for a variety of companies.
Although the Schumer Box is included on the credit solicitation, only the Cardholder Agreement details ALL of the terms and conditions of the account. The initial offer of credit often excludes important portions of the agreement.
Just because you receive a particular credit offer in the mail doesn’t mean that you will be approved for the same offer. You may still be extended an offer of credit, but with less favorable credit card terms or a lower credit limit.
Beware of the term “introductory rate,” which indicates that the annual percentage rate (APR) of your card will change after a period of time.
Credit card terms and conditions can change at any time, so be on the lookout for mailings with “Change-In-Terms” literature enclosed.
Be an educated consumer. The more you know, the better off you will be. Since education is the key to a financially fit life, consult an expert credit counselor. A certified consumer credit counseling service can offer important educational advice, and even help you manage your credit card debt if it is necessary.
Contact Clearpoint Credit Counseling Solutions for a personalized consultation at 800.750.2227 (CCCS). If you are in debt and have mismanaged your credit accounts in the past, we can help. Go ahead and get started with a free budget review.