Can Consumers Understand The Fine Print?

The absurdly miniscule size of the type combined with the fact that most of the information they contain is written above the reading level of the average American almost makes it seem like credit card disclosure documents are specifically designed to be a difficult read.

Legally, credit card companies have to send out a disclosure of terms to all of their cardholders, but they apparently the companies are not required to make said disclosures easy to understand. In fact, the Government Accountability Office concluded recently in a survey that the information provided in most disclosure letters is not only poorly organized, but also written using language that is tricky to comprehend.

MasterCard did their own study and discovered that just over half of the consumers they surveyed, some 55%, were not even aware of certain perks and benefits that were available to them through their credit cards. In some cases, cardholders even paid extra for the privilege of having benefits they already had in the first place.

Most credit card customers know about the airline mile rewards program or cash back incentive program offered by their credit card, but they don´t know about other benefits being a particular card member may afford them. These perks, which are wasted if they go unused, can be real money savers.

A few of the standard benefits on offer by most credit card issuers are: car rental loss and damage insurance; travel accident insurance; trip cancellation insurance; lost luggage insurance; extended warranties; and security from unauthorized purchases. Of course, specific details vary based on the issuer and type of card.

The best way to educate yourself about the plastic perks you have hiding in your wallet is to carefully (re)read the original paperwork you received when you first opened your account. If you have long since lost your disclosure letter, simply call your credit card company and request that a new copy be sent to you. Don´t let the daunting nature of the disclosures deter you from learning how to use your cards to your best benefit.

Here's Where Cash Is Not Always King

Shockingly enough, some retail stores are no longer accepting cash in exchange for certain goods and services.

If you are in the market for an iPad, for example, don’t expect to waltz into the Apple Store and buy one with a fistful of paper money. This was learned the hard way by a disabled California resident by the name of Diane Campbell.

As told by ABC7 reporter Michael Finney, Diane, who is on a fixed income, scrimped and saved until she had $600 with which she hoped to purchase an iPad. But when she went into the Palo Alto Apple Store with her money, the clerk declined to sell her one, saying, “sorry, we don’t take cash.”

As it happens, Apple has an iPad purchase policy which specifically states: "iPad purchases are limited to 2 per customer and must be purchased with a Credit Card or Debit Card only."

In other words, you won’t be the proud owner of an iPad if you attempt to buy one using either cash or a gift card. Their iPhone purchase policy is very similar:

"iPhone purchases are limited to five iPhones per customer and must be purchased with a Credit Card, Debit Card or Gift Card."

These rules are apparently Apple’s attempt to prevent the reselling of iPads and iPhones in foreign markets, but that fact does little to ease the frustration of someone like Diane who simply wanted an iPad to help further her guitar lessons. As she puts it, "Come on Mr. Jobs, give a sister a break, okay, I'm not going to go sell my iPad."

As outrageous as a store refusing cash sounds, it is not illegal. Here’s a snippet from the United States Department of the Treasury’s site:

“There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise.”

“Travelers should be well-accustomed to only being able to swipe for snacks or drinks in-flight, as many airlines have had cashless cabins since 2007.” – says Jennifer Brown, credit specialist at BestCreditOffers.com: Since cash can present a security problem, merchants are not always willing to accept it or have it in their shops.”

There is, in fact, less actual paper money out there for consumers to spend. Last year, the Treasury Department printed fewer $5 bills than it had in over 30 years and they produced no $10 bills at all. That’s a new modern low in terms of printing cash. According Credit-Land senior economist Arnold Taubman, credit card usage has increased by over 100 percent from 1999 to 2010. This data reveals that consumer spending has drastically shifted from dollar to credit payments.

The convenience of using plastic for purchases has contributed to the decline in bill printing, as well as the steady growth of online retail business where paying by credit or debit card is the only option. But the dollars of today also have more longevity than those that were in circulation at the end of last century, able to withstand over twice as much wear and tear.

Being tipped in cash is still preferred by those in the service industry, so don’t bid adieu to your bundle of bills just yet. But to make sure all of your bases are covered, it’s wise to tuck a credit card alongside that wad in your wallet.

Article published by Business Insider