15 “Fine Print” Items in a Credit Card Contract That You Need to Know About

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Credit card contracts are infamous among consumer advocates for a variety of reasons, including the heavy use of legalese and dense blocks of text.

Cardholders feel the same way. Often consumers give up reading their credit card contracts because the language card providers used was too "confusing" and "complex."

While credit card contract terms across the board seem to vex cardholders, the language on rewards and frequent flyer miles seem to really confuse Americans. According to a new study from NextAdvisor, 54% of U.S. adults find frequent flyer contract language "confusing" while 47% say they're "perplexed" by loyalty program terms and agreements.

"Even worse: 24% don't have a clue as to how to redeem their rewards in general, which means they're wasting their own money," the NextAdvisor report states.

Make no mistake, giving up on reading credit card contracts can penalize you financially in multiple ways. Chief among them are "surprise" fees, interest rates and payment obligations that you may not have realized when you agreed to the credit card contract. The problem is, once you sign the card contract, you've accepted the credit card provider's rules and terms — for better and for worse.

The way forward for credit card consumers is to know what key card contract terms and language really mean, and to use that education to take the necessary steps to get the maximum value out of their credit cards.

Start that process by recognizing these 15 "fine print" credit card terms and consumer obligations in credit card contracts—and get on the path to credit card mastery.

1. Arbitration Terms Tend to Favor Credit Card Companies

Language in most credit card contracts calls for any disputes over card charges to be umpired by an arbitrator usually selected by the card issuer. You can always get relief by asking your card provider for the correct documents that allow you to opt out of arbitration mandates.

Write or call the credit card company directly (within one month of signing a card deal) asking to opt out of any arbitration mandate. If the card issuers okay that you are opting out, you'll avoid the mandate and still get your credit card.

2. Missing Payments Can Halt Low or No-Interest Rate Card Offers

There may be different language used regarding zero-interest or low-interest introductory offers. Read the language carefully on what happens if your miss a payment. Usually that action triggers a heavy penalty rate — sometimes over 30%.

3. Understand What Happens When Intro Rates Expire

You'll want to know what happens if you accept a 0% card offer, but owe even $1 of the original balance when the 0% deal expires. When that happens, contract language often states that your card company can boost your interest retroactively.

4. Heavy Cash Advance Fees

The language in card contracts includes ATM cash advance fees. Usually, cash advance interest rates are much higher than they are for regular card purchases—often well over 20%. Watch out for extra "cash out" advance fees, too. Read more here to learn about common credit card fees.

5. Credit Card Companies Can Hike Rates Whenever They Feel like It

All the leverage on interest rate charges lies with the card issuer. In fact, hidden deep in some credit card contracts is language that allows card providers, in most cases, to boost interest rates for various reasons. For example, an issuer can hike rates when a credit card promotional rate ends, when there is a variable rate language in the contract, or when card owner makes a late payment. Act on your right to be notified within 45 days of a card rate hike, and know that most rate hike notices come in the mail—and in a thin, white envelope that you can easily miss.

6. Two Bites of (Your) Apple

Cardholders may not realize it, but the language in card contracts means that late payments can impact you in two ways. Once in the form of a late payment fee and again in the form of an interest rate hike. Know that before you procrastinate on a card payment.

7. Payment "Grace Periods" May Be Reduced

Historically, credit card companies have been generally okay in offering grace periods of 25 days, without triggering big penalty fees and rate hikes. Recently, those grace periods are tightening, with some credit card providers cutting them to 21 days or so.

By definition, a credit card grace period is the timetable between the end of the monthly credit card billing cycle and the credit card payment due date for that payment cycle. Pay the full amount owed by the due date and you'll steer clear of onerous interest charges.

8. You Can Read Your Card Contract Before You Apply

Credit card consumers may understandably believe they won't see the card contract early in the application process, and often just before they're supposed to sign off on the card. These days, though, card providers include a web link to the contract on the credit card application web page. Put it to good use and review the contract before you apply for a credit card.

9. Getting a Rate Decrease

Buried in the credit card contract is language that compels card providers to review your card account once every six months to potentially decrease your interest rate if you've paid your bills on time. Hold your card provider accountable for that stipulation—it might come in handy.

10. Rights on Late Fee Payments

Card companies include language in credit card contracts about late penalty fees. But what might not pop up is mandated language that states card companies can only charge late fee and over-balance credit card limit fees of about $25 for a first offense and about $35 for a second offense within the next six months (the fee amounts can differ with various card providers.) Know the contract rules and hold card companies accountable for any fee and penalty charges within those mandates.

11. Check for "Affiliate" Language

Card companies typically have privacy policy language in card contracts that stipulate they can share your personal data with affiliates—or companies where they share formal business agreements on a contractual basis. They may or not name the affiliates directly, but check under "affiliates" in your contract to find out for sure.

12. Closing Your Account for No Reason

Sure, a card company can close a card account if the cardholder isn't making payments. But cardholders may likely not know that a card company can close a credit card account using any rationale they want (for example, card providers have been known to close accounts because the specific credit card wasn't profitable).

13. Opting out of Data Sharing

Credit card customers have the right to opt out of any data sharing. If you don't notice the opt-out language in your contract, make sure to ask your card provider about it.

14. Know What "Default" Means

Credit card contracts will include a section on card defaults, such as when you're overdue on payments. Note that default actions are also triggered when you exceed your credit card spending limit if you don't agree to changes to your card contract, or even if you don't use your credit card. The fact is, card providers can cancel your card for a variety of reasons, and cardholders should know that.

15. Browse a Massive Credit Card Database, Thanks to Uncle Sam

Lastly, to get better educated on credit card contracts, and what they really say, The Bureau of Consumer Financial Protection (also known as the Consumer Financial Protection Bureau or CPFB) offers a database of credit card agreements by an issuer on its website. Find it here.

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