Plastic's big promises can bewitch young adults
"Everyone has at least one dream destination they long to explore, a serene far-away island or maybe a bustling city bursting with cultural intrigue." It should go on to say a Visa credit card can make this happen.
That's how it comes across in the card's promotional material -- complete with a mood-setting surfing photo. It makes you feel like you're getting something for nothing.
Anyone who's gotten offers like this before knows they can be a slippery slope. But what about those new to credit cards? Would they know what they're signing up for, or would the surfer dude suck them in?
The lure of credit runs strong in our society, and a piece of plastic is a convenient, necessary survival tool. That's why it behooves young consumers to understand all the tiny details of the credit card application. Reading the fine print can be a money-saver.
Take the Visa Citi Platinum Select application that was mailed to one of my kids.
After reading how to "get where you want to go with the card that gets you there in style" comes the nitty-gritty in the terms and conditions section.
First, there's a $95 annual fee just for the privilege of carrying the card in your wallet. Then there are the interest charges: 15.24 percent on monthly balances; a charge of up to 29.99 percent on a late payment; 15.24 percent for transferring balances from another card to the new card; and 25.24 percent for cash advances.
By the way, the monthly bill is due 23 days after the close of the billing cycle -- and adding a stamp and licking the envelope the day the payment is due doesn't mean you've paid on time.
On the other hand, the card offers buckets of travel rewards points, a free pass on checking one bag on American Airlines, and priority airplane seating perks.
How can a young consumer determine whether this card is a good thing, or whether better deals can be had?
CompareCards.com, a 12-year-old online service that evaluates credit cards, recently introduced a tool that helps consumers understand and compare fees on various Visa, MasterCard, American Express and Discover cards.
The free service, called the Credit Card Fee Experiment, is found at CompareWallet.com. (Other good sites for checking credit card fees and services are at LowCards.com and CardRatings.com.)
The card fee database has information on more than 100 credit cards, and it is quick and easy to use.
The site provides information in eight categories: annual fees, balance transfer fees, cash advance fees, foreign fees, late payments, returned payment fees, return check fees and charges for exceeding borrowing limits.
You also can find more detailed descriptions of the cards, written by the CompareCards staff, along with a five-star bottom-line rating.
The Visa card with the surfer dude image? Two stars.
Another educational feature at CompareCards.com: Downloadable lesson plans for high school and middle school teachers that focus on educating students about credit and money management.
When picking plastic, it pays many times over to know what to look for -- and what to avoid.