Read fine prints of a great credit card offer

June 3rd, 2010 by James

Read fine prints of a great credit card offerAccording to Synovate Mail Monitor, which tracks direct-mail offers, credit card solicitations to U.S. households increased 29% during the first quarter.

Bill Hardekopf, chief executive of LowCards.com, said most of the credit card offers today are going to consumers with good-to-excellent credit.

From USAtoday.com:

In addition, the credit card reform bill has reduced some sources of lenders’ revenue, and they’re looking for other ways to make money. What to watch out for:

• Balance-transfer fees. Lenders are still offering 0% introductory rates to card holders who are willing to transfer their balance to a new card. But increasingly, they’re charging fees of up to 5% on the amount you transfer, with no cap, says Ben Woolsey, director of marketing for CreditCards.com. That means transferring a balance of $20,000 could cost you up to $1,000.

• Shorter periods for introductory offers. A few cards are still offering 0% rates for up to 18 months, but a six-month introductory rate is becoming much more common, Woolsey says. (The credit card reform bill prohibits issuers from offering introductory rates for less than six months.) Be realistic about whether you can pay off your balance before the offer expires. And pay your bills on time: Some issuers will cancel your introductory rate if you make a late payment, Hardekopf says.

• Annual fees. There are still lots of rewards cards out there, but increasingly, they come with an annual fee, Woolsey says.

That’s particularly the case with cards that offer airline rewards, he says.

But before you apply for a credit card, do make it sure to read the fine print as balance-transfer costs, annual fees, and late-payment penalties will not be written in the bold type on credit card solicitations.

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