Credit Card

The Shocking Truth About Credit Cards

Pay Attention To Credit Card Agreement Details

Credit card agreements include a lot of fine print. Of course, this is where your rights and responsibilities are spelled out. When you sort through offers for traditional or secured credit cards, it’s important to pay attention to those details.

Interest Rates Could Rise

One surprise in the fine print is that there is no cap on how high your interest rate can go. The issuer can raise your rate as high or as many times as they want to. The interest rate stated in the offer may only be protected for one year. After that, the rate could go up.

You might also be shocked to learn that you can reject an interest rate hike on your credit card. At that point, the issuer could either close your account or agree to let you stay at the original interest rate. There is no guarantee that you will get to keep your original interest rate.

There is no guarantee that you will get to keep your original interest rate.

Protection Is Available

On the bright side of things, many credit cards can offer added protection against fraud. Perhaps you bought an item from an online auction that never arrived. Your credit card might reverse the charges.

If the item was not as described, you may be able to get a refund. This is a part of the Fair Credit Billing Act.

When you’re traveling internationally, you might feel like using a credit card is easier than dealing with currency conversions at a bank. Your credit card may deny international purchases when you are traveling. This is designed to protect you from fraud, but it could also be inconvenient when you are on vacation. Some cards do allow international purchases, but may also charge a foreign transaction fee. You will want to check out the terms for foreign transactions before traveling abroad.

Spending Limits Change

Your credit card issuer could lower your spending limit at any time. There is no law that requires a credit card issuer to tell you when your credit limit has been decreased. You may only find out when you attempt to make a purchase and your card is declined for the amount of the charge.

One of the best things you can do as a credit card holder is to check with your issuer for anything you may have missed. Make sure you follow up on your spending limit, interest rates, and any details in your contract that sound confusing.

Make sure you follow up on your spending limit, interest rates, and any details in your contract that sound confusing. Click To Tweet

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