7 Small Print Pitfalls to Watch for with Credit Card Offers

Credit card terms and conditions are lengthy, and not often easy to understand for the average consumer. While the 2009 Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) ended some confusing industry practices and have resulted in a clearer, fairer credit card marketplace for consumers, it's still quite easy to be caught unaware by information in the small print of credit card agreements. Here are 7 fine print pitfalls you should watch out for when considering credit card offers.

1. The Cost of Cash Advances

You may have signed up for a card with a 12- or even 18-month introductory 0% rate, but that rate doesn't apply to cash advances. In fact, cash advances are often subject to higher interest rates and extra fees than normal credit card purchases. Cash advances on your credit cards should only be taken in emergencies due to the high interest that accrues from day one.

2. The True Cost of Paying Late

Pay one day late and not only are you assessed a late fee, you may be hit with a higher interest rate that is charged retroactively against the past 60 days of purchases. Pay late twice in a row, and your interest rate can really spike. That great 11% rate can suddenly jump to 25% after just one late payment.

3. 0% Store Credit Card Traps

Store credit cards with 12-month introductory periods with 0% interest rates are tempting. However, you have to tread very carefully. Should you make a late payment or fail to pay off your initial purchase within the 0% window, interest is retroactively applied to the original purchase on day one, and those interest rates are often quite high.

Next step: Sign up for Mint and learn to track credit cards more efficiently.

4. Rewards Earning Limits

Many rewards programs have monthly, quarterly, or annual limits on the rewards you can earn. This can sometimes prevent you from accruing rewards late in a particular billing cycle or in the calendar year. Additionally, some types of rewards, like airline miles, must reach a plateau before they can be redeemed, and these plateaus aren't guaranteed to stay the same. Should the card issuer increase the number of points or miles needed for redemption, it could render those you've already accrued unusable until you reach the new plateau.

5. Insurance Benefits and Their Conditions

Some cards offer travel accident insurance and car rental collision damage coverage, which can both be very helpful, as long as you understand the terms. For example, you may need to book your entire fare on your card to get travel insurance, and you may not get it if you pay with miles or points. Car rental benefits may not kick in until after your own car insurance pays out, and it might not cover certain types of vehicles.

6. Roadside Assistance May Not Help You That Much

Some cards offer a number you can call for roadside assistance if your car breaks down. However, there is generally a charge for this service, which is typically applied to your card, and benefits are limited. Visa's roadside assistance charges $59.95, and only covers a five-mile tow. After that, you're on your own as far as dealing with the towing company.

7. 0% Interest Balance Transfers May Come With a Surprise

Credit card companies have been known to use low- or no-interest balance transfers to get you to inadvertently reinstate old debts (whether you already owed them to the card issuer or whether the card issuer purchased them from another creditor). These are debts they could not legally collect by suing you due to the statute of limitations running out. Read the fine print on balance transfers, because by signing up you could be renewing old debts.

Reading the fine print of your credit card offers is nodiv's idea of fun, but it's really the only way to protect yourself from mistakes that could cost you money. With credit cards, your best bet is often keeping things as simple as possible by not taking out more credit than you can responsibly handle, and ideally by paying off your balance in full every month to avoid interest charges.

When you use a great budget tool like Mint, you gather all your credit and other account information in one place so you can easily check balances and see how close you are to credit limits. Mint can send you text alerts whenever you get close to your card limits to prevent going over. You can even have Mint alert you to unusual or large purchases so you can check for possible identity theft. Mint empowers you to make your cards work for you rather than the other way around.

Next step: Sign up for Mint and learn to track credit cards more efficiently.