Credit card terms and conditions can be hard to navigate — here are 5 things to look out for when you apply

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  • Your credit card’s terms and conditions might not be obvious on the card application page.
  • Known as a Schumer Box, it’s where you’ll find interest rates, fees, and important information.
  • Knowing your card’s terms can help you avoid unnecessary charges or unpleasant surprises.
  • Read Insider’s guide to the best rewards credit cards.

Nobody likes to look at pages of credit card terms and conditions, except maybe the lawyers who get paid to produce all of it. But thankfully, the law requires credit card issuers to display a card’s most important terms and conditions in a standardized table, with large type.

This table is called the Schumer Box, after New York Senator Charles Schumer who championed the legislation that did away with much of the fine print. 

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It can still be tricky to find (and comb through) a Schumer Box. Here are five things that you need to watch out for when you’re applying for a new credit card.

We’re focused here on the rewards and perks that come with each card. These cards won’t be worth it if you’re paying interest or late fees. When using a credit card, it’s important to pay your balance in full each month, make payments on time, and only spend what you can afford to pay.

Find the Schumer Box

While credit card issuers are required to make a Schumer Box available to applicants, some have taken almost a “Where’s Waldo” approach to hiding the link to it on their websites.

Read more: 5 things you might have agreed to without realizing when you signed up for a credit card

I study and report on credit cards for a living, and even I’m often frustrated trying to find a card’s Schumer Box. To find the elusive box, look for links scattered around that are labeled not just “terms and conditions” but also things like “rates and fees,” “pricing and terms,” “pricing and information” or “rates, rewards, and other info.”

The Schumer Box may be nearly impossible to read

Lately, I’ve been seeing some card issuers cram the box in a really narrow window that you have to scroll through endlessly to read.

It can feel kind of like trying to read a book through a mail slot, which I have to believe is intentional. To get around this on your computer, place your cursor in the window with the Schumer Box, select all (Ctrl-A on Windows PC or Command-A on Mac), paste it into any kind of word processing document and voila, it’s readable. 

Check out the key interest rates

Now that you’ve found the Schumer Box, and are able to easily read it, start by looking at the card’s interest rates. The most important rate for most people will be the interest rate for purchases, which will usually appear at the top.

Many cards offer multiple rates, or a range of rates, and the rate you receive will be based on your creditworthiness at the time you applied. Also, nearly all credit card rates are now variable rates that will rise and fall with the prime rate.

Read more: The best low-interest credit cards in 2021

Other rates to be aware of include promotional rates for new purchases, balance transfers, or both, along with how long those rates will apply. And although the Schumer Box should disclose penalty interest rates and rates for cash advances, you should really do everything possible to avoid ever incurring interest charges for those reasons.

Take a look at how and when interest is charged

Nearly as important as a card’s interest rate is the way it will be charged. Nearly all credit cards offer a grace period that allows you to avoid interest by paying your balance in full on or before the due date.

Read more: The most convenient tools to help pay off credit card debt can ultimately save thousands of dollars

But here’s where you’ll learn how long the card’s grace period, which is the number of days between the statement closing date and the payment due date. Most cards have a grace period of either 21 or 25 days. Be extremely cautious if the card doesn’t offer any grace period.

Scrutinize the fees

If the card has an annual fee, this is where you’ll see it and learn whether or not it’s waived the first year, as it is with some cards. Subprime cards marketed towards those with poor credit can even have monthly fees and “program fees.”

Another fee to look out for is the balance transfer fee, which is typically 3% to 5% of the amount transferred. Many credit cards still have foreign transaction fees, which can be assessed any time a transaction is processed outside of the US, even if you haven’t left the country, or if you’re traveling, but making the charge in US dollars.

Read more: 7 credit cards without foreign transaction fees, so you can save money on international trips

Thankfully, many of the best travel rewards credit cards no longer charge this unnecessary fee, but you’ll still find it on many non-travel cards. 

Bottom line

Applying for a credit card is an important financial decision, and you want to arm yourself with all of the facts necessary to make the right one.

By finding a credit card’s required disclosures,  and taking just a few minutes to look at its key rates and fees, you can make an informed decision about applying for a new account. 

Jason Steele has covered credit cards, award travel, and other areas of personal finance since 2008. He also produces CardCon, The Conference for Credit and Credit Card Media.

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