Credit Terms

Fine print and its presence when you apply online for a credit card

When you apply for credit cards what you are actually doing is entering into a specific legal agreement with the credit card company that is sponsoring your specific credit card. The deal is simply that you are given the right to borrow up to your credit limit from them and in return you must pay the money back by the end of the grace period or alternatively suffer the interest rate that has been attached to that specific credit card.

All in all it is a pretty straightforward deal. This deal however is plagued with difficulties that many people don’t realize simply because people in general are very trusting. There are fine print sections on all credit card contracts that people do not read for whatever reason and even when you fill out credit card applications online there are still going to be fine print points available for your perusal.

Many people choose not to read these fine print points and end up getting a shock later on down the road when their lack of interest comes back to bite them in a very big way. The rest of this article answers some of the most frequently asked questions regarding the fine print we often see on credit card agreements.

What is fine print?

Fine print as a literal term simply means that there is print (i.e. lettering, just like the lettering you are reading right now) on the screen or on the paper that is very small in terms of size. It is done this way in order to discourage people from reading it and fine print is not limited to the credit card industry either.

Whenever you encounter a situation where you might have to sign a legal document you can be very sure that there will be fine print located somewhere on that document. As previously mentioned, fine print is where the company that created the contract puts the information that they don’t want you to read.

In the specific case of someone going to apply for credit cards that information is things that are negative about the credit card they are currently interested in. There are negative aspects to all credit cards and even good credit cards have fine print associated with them. If there was a perfect credit card, the credit card company wouldn’t make money from it!

What kinds of things are in fine print?

This ranges across different categories depending on the specific credit card you are interested in. A quick credit card search will show you that good credit cards from more ethical companies will have less fine print and vice versa for bad credit cards. In any case, here are two specific things that you might come across within the fine print of a credit card agreement.

Interest: The interest rate is the sole reason why credit cards exist. Credit card companies are very bottom line orientated and it is the interest rates that make them most of their money.

Interest rates can fluctuate up or down depending on what the fine print says and if the fine print contains information on an interest rate chances are it is going to contain information that says that the interest rate would go up.

Take the example of a card that bills itself in advertisements as the lowest APR credit card. The introductory APR on this type of card might be something like 8% but a quick look at the interest rate will show that the normal interest rate after the introductory period has expired is the industry norm of 20%. Not exactly that great a deal.

Fee: When you consider the different fees that are involved with credit cards it is very easy to get really frustrated. Some credit cards make you pay an annual fee whereas others might not but alternatively will make you pay fees for going over your credit limit or accidentally missing a payment.

These fees are a real pain in the neck but there is an even more insidious way that fees are used. Consider a credit card that calls itself a no fee credit card. By definition, these do not exist. There is no way a credit card can exist without a fee.

Read the fine print and see what’s up; you might fine that they only mean no annual fee or no overcharge fee but your chances of finding a credit card that actually has no fees is very remote.

How can I protect myself against fine print?

There is no way to really protect yourself from fine print. As long as it keeps working as well as it does today the credit card companies are going to keep on using it when anyone goes to apply for credit cards under their control.

You can however fight the urge to ignore the fine print and make sure that you not only read everything but also that you understand everything. Doing so will allow you to make a much more informed decision on your credit card choices.