Rough Economy? Read The Fine Print — Twice!

by Craig Peters, Contributing Writer   

In tough financial times, everyone looks for ways to cut expenses, increase income, and make their dollars go as far as possible.

Financial institutions are no exception, and the fine print in paperwork like your loan agreements and credit card contracts could be allowing them to make changes that cost you money without you knowing it — unless, of course, you took the time to read every word of the fine print when you signed up.

Here are a few tips and issues that will help you perform a reality check on your personal finances:

• Check the fine print on your credit card agreements. Many credit card accounts work like adjustable rate mortgages, and the rate you pay can be affected by a variety of factors.
  
  You probably don't have your credit card contract handy, but check your bill: The rate you pay is listed, and there will probably be a website address where you can go to check all the details.
• Beware of universal default clauses. If your credit card account is subject to a universal default rate, you could wind up paying an exorbitant interest rate in the event of something that seems quite innocent.
  
  For example: A one-day-late payment can trigger a universal default rate — even if that payment is for a different credit card or a utility bill. As you check the fine print in your agreements, language with phrases like "your interest rate can change at any time" should raise concerns.
• Do you have a home equity line of credit? Many banks reserve the right to limit or reduce the amount of credit you have available and may opt to do so during tougher financial times. If you're planning to borrow against that credit for an upcoming major expense, you might be in for a rude surprise.

Although it may seem like reading the fine print requires a lawyer, it really requires a clear head and common sense. Granted, it's not fun, but it's a good idea to force yourself to do it … it may save you a bunch of money.