Disclosure: This is a guest post.
When you apply for credit cards, or any financial product for that matter, you really need to know exactly what you’re signing up for. This means knowing the terms and conditions of the product before you officially sign yourself up. It’s surprising how many people are completely unaware of how their credit card account works, including the situations in which they may be charged extra fees, interest and penalties. Not knowing the basic facts about your credit card can make owning it very expensive indeed.
So, what kinds of things should you be looking for in your credit card terms and conditions? These documents contain a huge amount of information, and you could find yourself drifting off after the first couple of small print paragraphs. To make sure you are properly informed, you need to be looking for the following:
• What will happen if you pay your bill late. In almost every case, paying a credit card bill late or missing a payment completely will result not only in you having to pay interest on your balance, but also having to pay a penalty.
• Fees for exceeding your credit limit. Every card comes with a credit limit, which is the amount you can ‘borrow’ on it. If you exceed this limit (if the card even lets you), you are likely to be charged a fee.
• Fees for transferring the balance of your card to another card. Many people use balance transfer cards, which offer a 0% interest period, to shift their debt and pay it off without accumulating more interest. However, some credit card companies might charge fees for transferring balances.
• Fees for taking cash out on your card. Most credit cards charge a fee for taking out cash from an ATM using your credit card, which is often called a ‘cash advance’. These fees can be huge.
• What happens when you use your card abroad. Using your card in a foreign country can be really expensive, resulting in poor exchange rates and high interest, as well as fees and penalties. Find these out before you attempt to use your credit card abroad, or you could find yourself with a huge bill when you get home again.
• When the introductory offer period ends. Most credit cards come with an introductory offer to entice customers, such as a 0% interest period for 2 months, for example. Search the fine print of your credit card deal for when your introductory period ends, and make a note of it on your calendar.
Disclosure: This is a partnered guest post. Picture courtesy of blog.gocollege.com.