Even though legislation is being passed to protect credit card holders from abusive business practices like sudden interest rate or credit line changes, it’s just as important as even to read the fine print on those offers for new credit cards that will surely keep showing up in your mailbox. Here are some issues that you should make sure are crystal clear before you sign up for any credit card offer:

- Annual Fee: A low interest rate is great and so are airline miles or reward points. But one of the costs that many consumers fail to consider is the annual fee associated with a credit card. New cards are more likely to include an annual fee provision, and that fee increases the effective rate that you’re paying for the privilege of using that card. An annual fee isn’t necessarily a reason to stay away from a card, but you should be sure that the value you receive from the card is worth the fee that you’re agreeing to pay.

- Introductory Rate: This is the bait credit card issuers use to attract new customers, and it’s a powerful tool. If you carry a balance on a card with a 20% APR and another company offers zero percent interest for 6 months, it could be a good opportunity to eliminate interest for a period of time and put a dent in your overall balance. Be careful though-these teaser rates don’t last forever and you need to be aware of how much time you have before the rate increases, as well as what the rate will be when the introductory period is over.

- Fees: Apart from the interest rate and annual fees, there can be other costs associated       with credit card usage, and they can be substantial. Fees for late payments are generally well defined, but the thing that you have to watch out for is that sometimes a late payment or two will automatically trigger an interest rate increase. It’s definitely something to be aware of. In addition, many cards charge a fee for cash advances and the interest on cash advances usually starts accruing the day you receive the cash as opposed to after the grace period.

Some credit card offers will be a great fit for you and your financial situation and they are likely to continue to be an important financial tool when used appropriately, but the devil is in the details. Understanding the details is essential before signing up for any credit card offer.

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Tags: credit card, fees, introductory fee, Rates

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