I was recently approved for a credit card, but the annual percentage rate they quoted me was higher than the rate that was advertised on the application.  What happened? 

Buried in the fine print of your credit card application, agreements and correspondence from the card company are provisions that can cost you plenty. Here is one trap to look for in tiny type. You may notice sometimes the rate you’ve been charged on your statement is not the attractive rate you were offered. Some issuers determine the rate you’ll pay after reviewing your credit qualifications. If you don’t qualify for the lower rate, you’ll be issued a card at higher terms. Both rates must be disclosed on the application but it’s easy to overlook this in the fine print. When you receive a card for which you’ve applied, check the card holder agreement with the card to make sure the interest rate is the one for which you’ve applied. If it’s higher, call the issuer and cancel immediately.

If you cancel before you use the card, you won’t be responsible for any annual fees.

Source: Bottom Line Personal - Oct. 15, 1997

Written by:
Sandra McKinnon, Consumer & Family Economics Specialist, University of Missouri-Columbia, University Outreach and Extension

Cynthia E. Crawford, Ph.D., Consumer & Family Economics Specialist, University of Missouri-Columbia, University Outreach & Extension

Last update: Tuesday, July 05, 2005