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Knowing these secrets before you apply for a new unsecured credit card will help you get the best deal.
Comparing Credit Card Offers
Before applying for an unsecured credit card, compare offers different card offers. The terms between different providers can very widely and can have an effect on the amount of you pay in fees and interests.
The differences that you will encounter between different cards will be found not only among different brands, such as MasterCard, American Express or Visa, but also among different issuers of the same brand (i.e. Citibank Visa versus a Capital One Visa card).
Understanding the Terms of the Offer
The terms of the offer should be clearly stated and written in plain language. If you do not understand all of the terms being offered to you, be weary of applying for that card.
Check the Fine Print
Most credit card contracts are adhesion contracts. A contract of adhesion is a contract in which only one party has control over its terms. It is presented as a “take-it-or-leave-it” offer and the terms of the offer are non-negotiable.
Since many of us are not lawyers by trade, it is all too easy to slip in legal jargon that, at best, is confusing to a layperson. If you read the offer and come across a lot of legalese that is hard to understand or ambiguous, consider a different offer.
Understanding Annual Percentage Rate (APR)
Many times, you will receive a credit card offer that starts with a low introductory APR or Annual Percentage Rate of 0 percent. This seems like a great offer because the credit card issuer is essentially waiving all interest charges and fees for the period of the introductory APR.
The pitfall here is that as soon as the introductory period is over, the rate increases. This rate increase can be as high as 19 or 20 percent and apply to any outstanding balance owed at the time the introduction APR expires. On an outstanding balance of $1,000 with an APR change to 19.3% translates in $193 in additional cost.
Keep in mind that APR includes not only the stated interest rate but also any annual fees and late charges, which will increase the APR. You should know what the potential costs are to you when accepting a credit card offer so that you do not have any unexpected surprises later on.
Credit Card Act of 2009
The Credit Card Act protects your interest as a consumer by prohibiting certain practices that have been carried on by credit card issuers. This means that a company cannot change your APR suddenly without prior notice.
Many provisions of the new law do not go into effect until 2010. You should be familiar with the provisions of the new law and see whether any of the prohibited practices are still employed by any companies that you are considering.
These tips and secrets should help you make a wiser choice when selecting a new unsecured credit card. Be sure to read all documents and ask questions before accepting a new card offer.
Unsecured Credit Cards: Important Secrets Before Buying
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Find the Best Credit Card
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