I remember receiving my first credit card and thinking about how I could go out and buy anything I wanted and not pay until I got the bill. The bill did come, along with a payment due date and an interest rate attached to any unpaid balance. I realized if I didn’t pay my bill on time, suddenly that $25 bargain would end up costing me a lot more.

Credit cards are useful and when used carefully, provide advantages to consumers and businesses alike. They allow consumers to carry less cash but provide security in emergencies. But before you make a decision about a credit card, read the fine print and be aware of what your card offers you.

Things to know:

  • If you sign up for a credit card but never signed the application, you are deemed to have entered into the agreement and the terms the first time the card is used.
  • If you lose your credit card, you are responsible for a maximum of $50 for charges made to the card.
  • A credit card issuer cannot issue a credit card to someone who has not applied for one. If you do apply for a credit card, the application form must clearly state:
    1. If the interest rate is fixed, what the interest rate is
    2. If the interest rate is floating, the method for determining the interest rate
    3. Any grace period (when and under what conditions interest does not accrue)
    4. Any non-interest finance charges
    5. The date any of the information is in effect

Some credit card companies provide toll-free numbers or websites on the application where this type of information can be found. Be sure to read the additional information that comes with your credit card statement. The card issuer is required to tell you of changes such as an increase in the fixed interest rate or decrease in a credit limit at least 30 days before the change comes into effect. If we discard this information, it can come as a nasty shock to see an increase in the interest rate.


Always do your research. There are so many different cards out there that offer different rewards programs, annual fees, or types of protection. Ask your friends if they are happy with their credit cards or read reviews online.


How do your money-management skills stack up?
Answers to some of your money-related questions
Getting calls from a debt collector?
Tips if you’re considering a credit card reward program