Credit card issuers are back to inundating consumers with offers, many of them featuring low teaser rates, but be sure to read the fine print before signing on. Consumer Reports did just that, analyzing dozens of credit-card offers. Here are some typical gotchas to be aware of:
- Seasonal savings: Cash back on rotating categories that you have to opt into each time the category changes, such as those on the Chase Freedom and Discover More cards.
- Spending tiers: Offers of up to 1 percent on purchases, but if you spend less than $3,000 a year, only 0.25 percent cash back, like the Discover More card.
- Expiration dates: Check for expiration dates on rewards, especially with travel cards. It can take a long time to accumulate enough points for a ticket.
- Hidden caps: The Citi Dividend World MasterCard pays a $200 bonus after you spend $1,000 in the first three months, but it has an annual cap of $300 on certain rebates. Bank of America's BankAmericard Cash Rewards Visa pays 3 percent on gas, 2 percent on groceries, but spend more than $1,500 on gas and groceries in a quarter and rewards drop to 1 percent.
- Missed-payment penalties: Some cards take away your month's points if you miss a payment, and might charge a $25 reinstatement fee to get them back. The Discover More card takes away all your points if you miss two straight payments.
More consumers are being approved for new credit cards; only 14 percent were denied a card in 2011, compared with 24 percent last year, according to new survey data from the Consumer Reports National Research Center. But 35 percent of respondents also reported experiencing at least one credit-card problem, such as a new annual fee, higher interest rate, lower credit limit, or limits on rewards.