Understanding Credit Card Disclosure Documents

By: Lisa Nichols

Learn more about credit card disclosures before you apply for credit cards. The credit card disclosure must accompany credit card offers and includes detailed information about fees, penalties and interest rates. The disclosure is usually found on the back of the credit card application or as a pop-up or click-through for online credit card applications.

Breaking Down Credit Card Disclosures Documents -- APRs

Credit card disclosures include several sections. The introductory or promotional annual percentage rate (APR) will be listed in the disclosure. The default APR on a credit card is the amount the APR will be if the cardholder defaults on the credit card agreement. The default APR is much higher than the introductory or promotional annual percentage rate. A default APR may be enacted when a cardholder makes late payments or goes over the credit card limit.

Understanding Balance Transfer Credit Card Fees

The credit card agreement also includes information about fees. Credit card fees often occur for standard transactions. A balance transfer fee occurs when a new card is opened and a balance transfer from another account is made. The balance transfer fee usually depends on a percentage of the total of the transferred balance. Many put a cap on the total balance transfer fee that will be charged.

Review Credit Card Fees When You Compare Credit Card Offers

It's important to review the additional credit card fees when you . In addition to standard fees, credit cards also charge penalty fees if the cardholder defaults on the credit card agreement. Penalty fees are usually charged for making late payments, not paying the minimum amount due and going over the credit limit. In addition, some credit card disclosures outline a process for charging fees when the cardholder is late on payments for other lines of credit or loans. Cash advances may be subject to a higher interest rate or additional credit card fees. When you compare and > apply for credit card offers , take a close look at the list of fees to make sure that you understand all of them. If you have questions about APRs or fees, contact the credit card company before you apply.

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