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Not So Fine: 8 Items to look for in the Fine Print of a Credit Card Agreement

You never know what you’re signing until you read the fine print.


It is a saying that many of us have heard at some point in our life, but the fact remains that the fine print written into contracts such as credit card agreements leave use confused at best and highly frustrated at worst. Consumers all too often forgo reading the legal language written into the fine print of a credit card contract because the language credit card companies use makes little, if any sense.


According to a study released by NextAdvisor, 54 percent of adults stated frequent flyer mileage contract confuse the, while just under 50 percent of all adults polled find loyalty programs and agreements “perplexing.” What’s worse, more than one-quarter of the adults that took the survey don’t know how to redeem reward points.


The legal language tucked into the fine print of credit card agreements presents the same dilemma for many adults. Let’s review the 10 items to look for in the fine print of a credit card agreement.


Favorable Arbitration Clauses

Disputes over the actions taken by a credit card company typically are resolved through binding arbitration, which represents a clause tucked into a credit card agreement. Before you sign on the dotted line, ask the credit card company if you can choose not to participate in the binding arbitration process should a dispute arise.


What Happens When the Initial Interest Rate Expires?

Zero percent interest for 24 months acts like a magnet that snares many consumers. The incredibly low introductory interest rate should not be your focus. Instead, discover how much you have to pay in interest when the initial rate expires.


Costly Fees for Cash Advances

Cash advance fees usually are significantly higher than the fees charged for standard credit card purchases. Some credit card providers charge cash advance fees that exceed 30 percent. Make sure how much gaining access to your hard-earned cash costs you.


Missed Payment Penalty on Special Credit Card Deals

Credit card companies love to attract new business by offering no or low interest credit card contracts. However, if you miss a payment on a no or low interest credit card, you can expect to pay a hefty penalty. Find out much a credit card provider charges for a no or low rate card whenever a customer misses a payment.


Right to Ask for a Rate Decrease

Perhaps the finest of the fine print that is tucked into a credit card agreement concerns your right to ask for an interest rate decrease. Most credit card companies allow customers to request interest rate reductions once every six months. The problem is the companies do not clearly state that in credit card agreements.


Hiking Rates at Any Time

You might be surprised to discover many credit card providers add legal language into contracts that allow them to boost interest rates at any time. You have the right to know about a pending interest rate hike, with the alert coming from your credit card provider 45 days before a rate hike.


No More “Better Late Than Never”

What you know can’t hurt you does not apply to the late payment fees written into credit card agreements. Companies can charge just $25 for a first late payment and $35 for a second late payment within six-month intervals. Hold your credit card provider accountable for violating this consumer protection statute.


Take Control of Your Data

Consumers have the right to request not participate in data sharing programs. If you do not read any legal language that allows you to opt out of a data sharing program, take your credit card business to another company.


Perhaps the best tip of all for consumers regarding credit card agreements is to learn more about the legal contract. The Consumer Financial Protection Bureau (CFPB) offers consumers a database of credit card agreements from the major credit card providers.


James Schroeder is an attorney licensed to practice in Ohio, Pennsylvania, New York, New Jersey and the District of Columbia.


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