There’s hardly a day goes by that I don’t receive an offer for one of those credit cards that come with juicy rewards like cash back, airline miles or merchandise. I cashed in my “miles” or rewards points on one of these cards several weeks ago, got a check in the mail and used the money to buy a new iPhone. But like many things in life, it pays to follow the advice of caveat emptor and beware by reading the fine print of these offers before you jump in.
The lure is strong
The lure to sign up for one of these cards is very strong. If it promises cash back or merchandise it can feel as if you would be getting free stuff. However, choosing one of these cards can lead to problems. You need to make sure you understand what you’re signing up for which means reading not just the big print but the fine print, too.
Here’s an example
Here is an example of what I mean. I recently received an offer to apply for the Visa Citi Platinum Select Advantage card. The letter started out by advising me that it could “get me wherever I wanted to go and in style”. However, next came the TOS or the section with the card’s terms and conditions. When I read it I learned that there is a $95 yearly fee just to carry the card. Plus, there are those nasty interest charges. It was 15.24% interest on monthly balances, which would escalate to 29.99% for late payments. The interest for moving balances to this new card would be 15.24% and cash advances came with an interest rate of 25.24%.
It doesn’t mean you paid on time
Reading the fine print also taught me that my payment would be due 23 days after the billing cycle closes. If I send it the day it’s due, I haven’t paid on time and could get hit with an interest penalty. Of course, the appealing part is that the card offers a huge amount of travel rewards points and some neat airline perks.
Weigh the pluses and minuses
Anytime you get a credit card offer like this, you need to read the fine print and then weigh the pluses and minuses. I passed on this card because I felt the interest rate charges were too high, plus I don’t travel on airlines much anymore. So the perks were not that attractive versus what the card could actually cost me. I think I definitely saved money by tearing up the application.
Check out Comparecards.com
There is a free service that can make it much easier for you to decide whether or not to apply for a particular credit card and how much it would really cost you. It’s www.comparecards.com. This site has data on more than 100-plus credit cards and is extremely easy to use. You can get detailed information in 8 categories. This includes annual fees, fees for making balance transfers, fees for late payments, returned check fees, and lots more. There is even more detailed information as written by the CompareCard staff. There are also “star” ratings, one by its editors and one from consumers. In the case of the Visa Citi Platinum Select Advantage card, it not only had a very long name but also just a two star rating.
I searched its database
I used Comparecards.com to see how my Chase Freedom Card rated. You search the CompareCards database by issuer, which in this case was Chase. The first Card that came up was my Freedom card with $100 cash back and a 15-month 0% APR introductory rate. Since I got the card just a few months ago, I was pleased to see that it rated four stars. However, the Chase Slate card that my wife recently got rated five stars. Oh, well.