It must have been stated a number of times that you must read the credit card agreements cautiously to evade unpleasant surprises. For those who did not have the time to peruse unending pages of small print, there’s some ready help out here.

What to see

As you set out looking for a card, it is advisable to check out the agreement online prior to applying, either in the database of card agreements available with the Consumer Financial Protection Bureau (CFPB) or on the issuer’s website. Ensure that you can clearly comprehend fundamentals like penalty rates, the annual percentage rate and fees for taking out a cash advance or paying late. The CFPB released a publication highlighting the general areas which are covered by card agreements.

Over and above that, there are certain provisions you can watch out:

• Variable Rates. That rate visible in bold print which you signed up for might not remain forever. Over 70% of card agreements witness changeable interest rates which move in line with the bank’s benchmark prime rate. When the U.S. central bank would start hiking rates again, most likely in the mid of 2015, the rate pertaining to your complete balance would begin rising. That indeed may pose a shock following eight years of no rate increase. The Federal Reserve plans to augment rates by 4 percentage points within the coming few years.  Given the scenario, possessing a $5,000 balance would amount to $200 more yearly in interest per annum.
• Arbitration requisite. Binding arbitration implies you enter into an agreement not to move court in case of a dispute with the card issuer. A number of big banks have done away with arbitration requirements. Others have included an opt-out provision which expires within 30 or 60 days of utilizing the card for the initial time. Leveraging the benefits of the escape hatch does not imply that the concerned bank and you cannot opt for arbitration afterwards in case a dispute occurs. It simply indicates that you would not be required to.
• Credit protection. This may also be called “payment protection”. Irrespective of the name, the main aspect to understand is that it is voluntary. Many of the big issuers have eliminated these pricey insurance policies following fines imposed upon them by regulators. However, certain small lenders still offer these lucrative so called protection programs. Normally, these terms happen to be in a separate document and if you endeavor to peruse it, you will only discover the negligible benefit, in case you make a successful claim. So, avoid the trouble and accumulate the guts to say “no thanks”.
• Monthly maintenance fee. Subprime cards generally have these fees showing up. Some customers tend to ignore the added cost. The fees are waived for the first year by some issuers, so it stealthily creeps in when you are least aware. Moreover, the fees might also be charged in terms of the purchases you make, so it is all the more difficult to detect them.

Now that you have gone through the basics, hope you would not be left in the dark regarding the agreements. What if the banks do a poor job in illuminating upon their products!