When you open a new credit card, you know what to look for: the interest rate, the annual fee, and the rewards. These are the most important financial pieces of any card.
But there’s another important detail that’s often overlooked. And failing to look it over when you open a new credit card could seriously cost you. It could even financially penalize you.
It’s the fine print. All credit cards come with contracts that include a ton of legal language and dense, tiny writing – and that contract, or “fine print” as it’s known, is incredibly important. Though it can be confusing, it can cause you to pay more in fees, miss out on rewards, and unknowingly agree to surprise interest rates and payments.
If you don’t read the fine print on your credit card’s contract, you could pay for it. Reading that single document could help you avoid unexpected costs months or years down the road.
How to Find Your Card’s Fine Print
If you’re wondering what’s hiding in your credit card’s fine print, you need to get your hands on your contract and read it for yourself. But the problem is many people don’t even realize this document is available.
When you first sign up or apply for a credit card, you can read its fine print. However, credit card companies don’t make it clear – you won’t see a “contract” or “fine print” option anywhere in the application.
If you’re applying online, look for options like “terms and conditions,” “important rates and disclosure,” or even “offer details.” These phrases are typically links to the legal details of a credit card’s costs, benefits, and other important factors.
If you’re filling out a physical application or have received a credit card offer in the mail, you can find the printed “fine print” on the very last page of your physical documents. Usually printed in very small type, this fine print is often called “terms and conditions” as well.
Need to read the fine print for a card you’re already carrying in your wallet? You can find the fine print online. Head to your credit card’s website and look for terms and conditions or a cardholder agreement. Alternatively, you can also visit the Consumer Financial Protection Bureau, which features hundreds of credit card contracts on its website.
What to Look for in the Fine Print
Once you’ve found the fine print for your credit card, you’ll need to read it carefully. And there are certain details every cardholder should look for.
As you read your card’s fine print, make sure to keep an eye out for the following. They’re some of the most important terms and conditions, and they can result in higher fees or additional, surprising costs.
Annual Fees
Not every card charges an annual fee, but you’ll want to look closely at the fine print if yours does. The annual fee is usually well-advertised when you first sign up for a credit card – but it can unexpectedly change over the years.
An annual fee may increase after you have a card for a certain number of years, or it could only be waived during the first year if you meet certain requirements. Knowing these rules ahead of time could save you money and help you determine if a credit card’s fee is worth its price.
Bonus Spending Categories
Every rewards credit card works differently. Some feature a standard rewards rate, meaning you always earn rewards at a set rate. Others, however, use rotating categories. This means that every quarter, the purchases that offer you a rewards bonus change.
And if you aren’t careful, this can be a huge trap. Many credit cards actually cap the amount of rewards bonuses you can earn, place limits, and include specific loopholes.
For example, you could earn a bonus on travel purchases for one quarter – but that bonus could be capped at $1,500 in purchases. Or, you could earn 5 times the points on grocery purchases – but only up to 10 purchases.
The Terms of Zero- or Low-Interest Special Offers
Many people sign up for new credit cards that offer enticing offers like zero-interest or low-interest periods and rewards bonuses. And while these sound like incredible offers that can give you big benefits as a cardholder, they can also be a trap.
Check your card’s fine print to learn the true details, rules, and requirements for these zero- and low-interest offers. Some may only be valid for a few months, and others may increase your interest rate dramatically once they end. For example, zero percent interest for 6 months is great – but 18 percent interest every month thereafter is not.
Perks That Are Only Valid if Claimed
While the rewards and benefits of your credit card might sound great when you sign up, you may actually miss out on them. As many credit card customers learn the hard way, some perks require you to complete a special sign-up process in order to get them.
Check your card’s fine print regarding perks, benefits, and extra advantages. Items like airport lounge access, elite status with hotel chains, baggage or expense credits, and travel protections often can only be used if you follow a very specific signup process or annual registration.
Fees
Take a close look at the fees mentioned in your credit card’s fine print. While you might be aware of an annual fee or a fee for balance transfers, you may not know about other surprise fees you can be hit with for common issues, missteps, or even transactions.
Credit cards can charge fees for missing your payment due date, for exceeding your credit limit, or for cashing in your rewards. And when you’re traveling, you may also face fees for foreign transactions, currency conversion, and other unexpected expenses.
Be an Informed Credit Card User
No one should carry a credit card unless they know all of the terms, conditions, fee schedules, and charges that come with it. But unfortunately, most credit card companies don’t make it easy to find this information.
You need to seek it out. And you should do so before you even sign up or apply for a new card. You can find the information if you know how to look for it. And with this guide, you’ll be able to search for the details you need to understand every detail about your credit card – and avoid financial penalties.