How to Find a Good Credit Card Deal
What do you look for in a good credit card deal? I would argue that credit card contracts are more abusive than ever. So, you have to be careful. Here are some things to look for in a credit card agreement.
1) Let's Start with First Things First - The Card Member Agreement
The card member agreement is the 15 to 18 page document that tells all of the fine print. The bad companies try to hide it. The good companies are very transparent. I wouldn't sign any contract until you were comfortable with the fine print.
2) How They Handle Fraud
Before identity theft became such a wide spread problem, there was an unlimited amount of time to report fraud. Today, some credit card companies put a 60-day limitation on reporting fraud as well as consequences if you report something as fraud and it turns out not to be.
3) Penalty Rates
Good companies have penalty rates under 20% and provide a way back to non-penalty rates. For example, they reduce your penalty rate if you make 3 consecutive payments on time. Bad credit card companies charge over 20% and make them permament.
4) Grace Period If You Are Late with a Payment
Good companies allow for a 60-day grace period. Bad credit card companies penalize you if you are a minute late.
5) Playing Games with No Late Fees
The bad credit card companies tell you that they won't charge you a late fee if you are late with a payment. What is hidden in the fine print is that they will raise your rates to penalty rates if you are late.
6) How They Handle Collection Costs
Most all credit card companies will make you pick up debt collection costs if you default on a debt. The good credit card companies cap the cost. For example, you might be responsible for the costs up to 25% of the total collection costs.
7) Balance Transfers
Good credit card companies keep balance transfer fees under 3%.
8) 0% on Balance Transfers
Good credit card companies give you 12 months plus on 0% introductory periods on balance transfers. Bad credit card companies limit you to a time period under 12 months.
Credit card companies are in the business of abusive consumer contracts. You don't have the luxury of signing on the dotted line uninformed. Always make sure you read the card member agreement and that you can live with the fine print.