Terms To Watch Out For On Credit Card Contracts

Author: Amanda Hash
There are many predatory lenders on the credit card business. Not all credit card issuers comply with the regulations that protect consumers. Some find legal or apparently legal ways of bypassing certain restrictions by concealing additional costs that raise the overall charges without showing on the APR. Analyzing the credit card contracts carefully prior to signing will help you avoid such abuses from credit card companies.

There are several terms that you need to watch out for when considering a particular credit card offer. If you choose to make inquiries with the credit card agent prior to signing, make sure to request him to answer your questions in written. That way you’ll avoid surprises when you are handed over the credit card contract or later on when the agreement is already producing its effects. As the old saying states, better to be safe than sorry.

The APR Or Annual Percentage Rate

The APR is a rate that includes many figures, it includes the interest rate charged for financing unpaid balances, plus the insurance for the unpaid balance, plus any other costs that are calculated as a percentage of the amount remaining to be paid or that can be added to it without disrupting the calculations.

Credit Limit Or Maximum Amount For Purchases

Since credit cards are actually lines of credit, there is a maximum amount you can spend that will determine the money that is available to you. Bear in mind that this amount is only for purchases. Most credit card issuers define other amounts for withdrawals and different interest rates for that purpose too.

Insurance Fees Not Included In The APR

These fees and costs need to be controlled because it is possible that your credit card company is charging you other insurance fees than the one included in the APR which assures the repayment of the remaining balance in the event of death of the credit card holder. These additional insurance costs, though they may seem to be small amounts, can represent excessive payments in terms of percentages.

Penalty Fees Charged For Late Payments Or Exceeding Credit Limit

It is important too to control the fees charged as penalties for paying late (usually more than a day or two late) or due to exceeding the credit limit on your credit card contract (usually more than 10% of the overall credit). Though it is perfectly legit for the credit card issuers to penalize the lack of compliance with the credit card agreement, certain percentages or fees are simply abusive and thus, we suggest turning down credit card offers that overcharge on these topics as this is an example of predatory lending.

Conclusion

As you can see, there are several topics that need to be controlled when analyzing credit card offers. Credit card issuers will never lose, that is a fact. What you need to see is that the terms are advantageous enough for your particular needs so you do not lose money either by using that particular credit card. You can always get another card and transfer the balance but watch out for balance transfer fees and costs too.

About Author

Amanda Hash is an expert financial consultant who specializes in helping people to recover their credit and get approved for home loans, car loans, personal unsecured loans, unsecured credit cards, refinance home loans, consolidation loans, student loans and other financial products. If you want to learn more on how to get approved for Bad Credit Student Loans and Unsecured Bad Credit Loans just visit http://www.yourloanservices.com/ and you'll find all the information you need.

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