Credit card agreements, where your rights and responsibilities are spelled out, include a lot of fine print. Although it’s a lot of reading, when you sort through offers for traditional or secured credit cards, it’s very important to pay attention to those details. Why?
Interest Rates Could Rise
If the contract doesn’t explicitly say when you are eligible to have your interest rate raised or if there is a cap, you might find that there is no cap on how high your interest rate can go or when. 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. Make sure you know what you may be liable for.
You might also be shocked to learn that you can reject an interest rate hike on your credit card. However, if you do, the issuer could choose to close your account if they do not agree to let you stay at the original interest rate. There is no guarantee that you will get to keep your original interest rate.
Protection Is Available
On the bright side, many credit cards offer added protection against fraud. Perhaps you bought an item from an online auction that never arrived. Your credit card might be able to reverse the charges.
If the item was not as described, you may be eligible 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. Normally, your credit card may deny international purchases when you are traveling to protect you from fraud. That’s pretty inconvenient when you’re on vacation. However, some cards allow international purchases and even waive their foreign transaction fees. Check out the terms on your cards 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.