Credit card companies are notorious for having all sorts of sneaky tricks so they can make more money off of you. It can all be so complicated and confusing with all the legal jargon they use to “inform” their customers and potential customers. But if you’re young or unfamiliar with how the terms of use work, it’s never been a better time to find out because it can cost you a bundle. One good, old-fashioned marketing technique used in many industries is widely used by credit card issuers.

Essentially, this trick is used to lure in more customers by offering an “attractive” deal. Once they have your interest, and hopefully, a signature, you end up with a different product than what you thought you were getting, and it’s all legal! Here’s an example: You receive in the mail a fabulous, pre-approved credit card offer—no annual fee with and an incredibly low interest rate. Plus, it has some nice rewards. Sounds like one of those premium cards and you can have it! You figure, “what’s the harm?” The card you’re using now has a really high interest rate and it’s time to dump it. So you check off the boxes on the acceptance application and send it off. In no time at all, you receive your new card and stick it in your wallet. A month later and several charges later, the statement arrives in the mail, and much to your surprise, you notice an annual fee of $40. Looking closer at the statement, you pick up on the annual percentage rate that is much higher than what you thought you were getting.

 

After the initial anger wears off, you call the credit card company, only to find out that they determined you qualified for a different card than what was originally advertised. They also pointed out that this information was all described in the pre-approved application (in the fine print, of course!).

There’s no way around it—consumers have to read the terms carefully. It may be boring and hard to understand, but it can save you a lot of money. The fine print will always work to the lender’s advantage.   For customers they deem to be a higher risk, they can issue a more costly card with a higher annual percentage rate. If it isn’t what you want, don’t activate the card—cancel it instead.