Credit Card Traps to Avoid

A credit card can be a useful financial tool to have in your back pocket, but it can also be a slippery slope to expensive debt. Avoid credit card traps that end up hurting you more than helping you. Here are three of the most common ones out there to keep an eye out for.

Keywords “As Low As”

Don’t be fooled by this phrasing. It’s similar to a sale at a department store saying everything is on sale “as high as 80% off!” In reality, maybe only a few things are 80% off – and the rest is closer to 10% or 20%.

The same applies for the annual percentage rate (APR). Look for a credit card with 15% APR or lower.

Beware Fees

You’ve found a good APR – maybe even the best you can get. Before you hastily sign up for this new card, look at the monthly and annual fees. Unlike APR, which only applies to unpaid balances, you may also be charged an annual or  monthly fee that occurs until you cancel the account. Whenever you apply for a credit card, make sure you understand the total cost involved

Sign On Bonuses

Occasionally, you’ll find a credit card that has a sign-on bonus, usually in the form of rewards points or cash. Keep in mind the fine print on these bonuses, including whether the points are transferable, what the points can be used for, and if they ever go away.

Frequent flier cards can get especially tricky, so if you’re counting on those points, it’s imperative that you read the fine print before signing on. Oftentimes, you’ll also need to charge a certain amount within the first few months in order to qualify.


Take your time when signing up for a credit card! Balance the risks and rewards of the different cards to best fit your spending needs. Closing a credit card account can negatively impact your credit score, so it’s better to only open up quality accounts that work for you.