Understanding Your Credit Card Agreement

February 21, 2013, Written By Justin Hefner

You may be glad to receive that new credit card in the mail, but make sure you understand all the details associated with your card before you jump into the urge to splurge.

Reading the details spelled out by the issuer in the credit card agreement can save you a major headache down the road.

These agreements can be difficult to understand with the complex legal language and length of the document. The Truth in Lending Act requires the credit card issuers to disclose a number of facts so they are clear to consumers.

A good place to start is the Consumer Financial Protection Bureau, the federal agency that is a watchdog for consumers. The agency’s website has a section that all consumers should read entitled, “Know Before You Owe.” It is a helpful guide to understanding some of the details found in mortgage and credit card agreements.

The CFPB has developed a shorter, simpler credit card agreement that spells out the terms for the consumer. Go to the website and click on the link to print out a prototype credit card agreement, designed to help consumers better understand their card terms.

Keep in mind that credit card agreements can vary based on the issuer. Check out your own card agreement so that you know your rights in case you have a future dispute with the card issuer.


The information contained within this article was accurate as of February 21, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.