Credit cards are often presented as the best thing since sliced bread. Go to the home page of any popular credit card and you’ll see a list of fabulous features.
But dig deep into the fine print—the terms and conditions and other disclosures—and that’s where you might find out that this isn’t the right card for you after all. The fine print is where the caps, the thresholds and the do-this-and-you’ll-lose-your-rewards stuff lives.
I know the details are really, really boring. But if you don’t read it, you might not even be able to take advantage of the key features that are advertised. Or worse, you might be spending your heart out in the department store category only to find out that the cash back reward had a $300 limit.
OK, so I have a few examples to give you an idea of what you might miss if you don’t read the teeny tiny print. And remember, this is just a minuscule sampling of what might be hidden in the fine print of almost every credit card agreement.
This card has a rich travel rewards program. It’s attempting to reward consumers for opening an account, but an important detail is left out of the key feature.
Advertised: 7,500 bonus point – redeemable for a $100 statement credit – after you spend $500.
Fine print: You have to spend $500 within 60 days of opening your account to get the 7,500 bonus points. Now, I’ll give American Express credit for adding a tiny, linked footnote to this, but most consumers skim the features and miss the footnotes. If you aren’t planning to spend $500 within 60 days, you’re not getting the $100 credit.
This is basically a good card and there are several variations of it on the market, including great deals on balance transfers. But this card wins the award for using the phrase “up to” more than any other card offer.
Advertised: 5 per cent cash back in categories like travel, groceries, gas, restaurants and more.
Fine print: For January – March 2011, you get 5 per cent cash back on travel and restaurants, but only up to $800. After that, you get 1 per cent on purchases in this category. There’s a “program details” box in the upper right corner on the application page that explains the cap when you click on it. But the details about what happens after you reach the cap is in the Schumer Box (the box containing the terms and conditions), specifically in the “Rewards” section.
Advertised: Up to 1 per cent unlimited Cashback Bonus on all purchases.
Fine print: Up to 1 per cent cash back after you spend $3,000. For your first $3,000, you only earn .25 per cent.
More fine print: The rewards are unlimited and don’t expire, but if your card is inactive for 18 months, you forfeit your bonus points.