5 parts of a credit card application

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Credit card applications are easy to find, but their terms and conditions are hard to decipher. Filled with fine print and technical jargon, the terms and conditions and the credit card agreement that arrive with the card frequently make it difficult for consumers to determine important facets of the card. These include how much the card will cost, their credit limit and what happens if they miss payments.

Certain fees, such as the annual fee and balance transfer fees, and the APRs for the account must be disclosed in a table. In addition, consumers must receive a one-page agreement summary after opening an account, along with the agreement, thanks to new disclosure rules that took effect in July.

Before signing on the dotted line, here are five items you should find in a credit card’s terms and conditions.

Annual fees

Some cards have them, others don’t. Either way, your credit card’s terms and conditions should clearly note whether you’ll be forking over a yearly fee to have the card and if so, how much.


Short for annual percentage rate, this number dictates how much interest you’ll pay for maintaining a card balance. While some cards only have one APR, others come with an introductory teaser rate that expires after six months.

Penalty APRs

The offer must tell you what the penalty APR is and what can cause your rate to jump to the penalty APR. For instance, a penalty rate may be triggered by a late payment or exceeding the credit limit. The credit card issuer must also tell you how long the penalty APR will remain in effect.

Rewards terms

All the airline miles in the world won’t amount to anything if you don’t understand how to use them. Cards that come with a rewards program should have the terms and conditions clearly written in the terms and conditions.

Late and balance transfer fees

The bane of many cardholders, late and balance transfer fees can add up fast. Before getting a new card, peruse the credit card terms and conditions for information on how much moving a credit card balance from one card to another will cost you, as well as what happens if you miss a payment.