Play Audio Version Of This Post
Many people apply for, accept, and activate their credit card while never actually reviewing the terms, and discovering the hidden costs in credit cards agreements. Consumers should take the responsibility to be informed, and to be aware of credit card hidden costs because the card company itself is not going to be anxious to wave the full cost of using credit cards in your face.
You are responsible for acquiring the information on your own and you need to take the time to read and understand the agreement to which you are becoming a party when you activate that card.
Determining the true costs of card use can be difficult, however, when advertisements are often misleading and emphasize only the good points of card use. An ad highlighting the hidden costs of credit cards wouldn’t result in many applications. There’s only one way to avoid being fooled – read the fine print for yourself.
Unfortunately, our society treats plastic credit cards as if they were simply another form of money. Many people no longer carry cash when they can so easily swipe their cards at the gas pump, in the grocery store, and just about any other place in the world. The ubiquitous nature of the credit card means it is taken for granted, regarded as simply another convenience that is what it purports to be on its face, an electronic way to carry out commerce in the 21st century.
The most important thing to remember is that the credit card companies are in the business to make money. They aren’t going to do that if they simply provide a card to you, you use it to pay for things, and then pay off your bill each month. Interest rates and hidden fees are, in the eyes of the credit card company, simply profit potential – good for them but if not monitored potentially disastrous for you.
How The Card Companies Fool You
There are a variety of ways that credit cards can mislead consumers starting with “teaser” rates, which are low interest rates advertised to snag new customers but that expire after a given amount of time. Usually the good rates last a maximum 12 months if that long. After the introductory period is over the rate climbs and customers can easily accrue large amounts of interest before they even realize it.