Beneath the glossy advertising and loudly trumpeted features of every credit card lies enough small print to scare even the most seasoned consumer. As painful as it might be, however, looking at the small print is vital if you don’t want to find a nasty surprise in your next statement. Below are a few things many card companies do that you probably won’t see anywhere in the advertisements:

• Charging you through the nose for cash advances - Whenever you take money out of an ATM with your credit card you are getting a cash advance. You start paying interest on a cash advance immediately and on most cards you pay a higher rate of interest than you otherwise would. Rather than relying on credit, you’re far better off linking your card with a checking or savings account or even using a separate debit card entirely whenever you need cash.

• Changing the interest rate on you - Many card issuers now offer a special low introductory rate to entice consumers. Whilst the initial rate is often aggressively advertised, the interest rate you’ll have to pay once the honeymoon period expires is much higher and usually well hidden in the small print. Cards with a low introductory rate can be very useful, but make sure you know exactly when the card reverts to its regular rate. It is crucial that you eliminate or drastically reduce any debt before this happens.

You should also be aware that whilst some cards have a fixed-rate APR (annual percentage rate - the yearly interest rate on your card) which never changes (or at least changes very rarely), other cards have a variable-rate APR that can change fairly regularly, depending on the prevailing economic conditions.

• Charging you interest from the date of purchase if you don’t pay back the debt in the interest free period - You get an interest free grace period on your card, typically between 30 and 55 days, during which you may repay the purchase you made on your card without incurring any additional costs. However, should you not repay your debt within the interest free period you will probably start paying interest from the date you made the purchase, not from when your interest free period expired.

Example - John has a card with a 15% APR and a 30 day interest free period. John buys a stereo system for $4000 on the 1st November and hasn’t paid any of it back by the 1st December. On top of late fees, John is automatically charged over 50$ in interest fees. Even though his grace period has only just expired, he is charged interest from the date of purchase and so already owes a months worth of fees.

• Charging you interest on the whole purchase price if you leave even $1 unpaid - On many cards, if you leave any amount of a purchase unpaid you are charged interest on the full cost of the purchase. In other words: if you buy a couch for $1500 and repay $1200 on it shortly afterwards, you will still be charged interest on the full cost of the couch, even though you now only owe $300 on your card.

• Allocating your repayments so that you end up repaying debts with the lowest interest rate first - You might think that there is only one standard rate on your card, but in actual fact on most cards there are several. Cash advances, balance transfers and purchases are all usually charged at a different interest rate. Depending on the card your rates may also change if your outstanding debt passes a certain threshold or you are consistently late making payments. The bottom line is that if you have debt on your card, there is a good chance that some debt is costing you more and whenever you make a repayment you’ll most probably be paying back off your ‘cheapest’ debts first.

• Fees, fees, fees! - Set-up fees, transaction fees, missed payment fees, over your limit fees, currency conversion fees, foreign transfer fees, cash advance fees, dishonour fees, annual fees, reward program fees - it’s pretty safe to say that if you use a credit card, you’ll wind up paying fees somewhere along the line without even knowing why. Keep a close watch over your statement and do a little more reading - you’ll find that some companies are far more reasonable than others.

• Offering to increase your limit or getting pre-approval for a card in the mail - Consumers often feel that an offer from the bank to increase their credit limit (i.e the maximum credit you can use on your card) or automatic acceptance into the latest credit card program is a reward and should never be turned down. In actual fact, taking up these new ‘opportunities’ may prove costly in the long run. Before automatically upping your credit limit, ask yourself if you actually need to - always remember that the higher your credit limit is, the more potential trouble you could get yourself into. As for accepting that card in the mail - does it offer competitive rates? Would it be a major improvement on your current card? If the answer is no, you are better off throwing away the offer with the rest of the junk mail.

Summary: This is by no means a comprehensive list of the tricks the card companies play on consumers. The only way to fully protect yourself is to check your statements regularly and thoroughly and always read the product disclosure statement (i.e ‘the small print’) so you can pick the good cards from the bad.