In an effort to make themselves stand out from the slew of credit card offers being sent out daily that are designed to entice creditworthy consumers into applying for new lines of credit, some card issuers are plumping up the perks associated with their particular brand of plastic.
However, those hunting for a new credit card to tuck inside their wallet take close heed: some of these benefits being extended that certain credit card companies are going out of their way to specifically point out they offer are, in fact, federally mandated. In other words, tricky lenders are trying to psyche you up about them giving you something that they have no choice but to provide and lead you to believe that you are getting something special. So keep your eyes peeled for the following two “perks,” and when you see them touted in bold-faced type followed by multiple exclamation points, do what you can to keep your enthusiasm in check.
$0 liability for unauthorized purchases, should your card be lost or stolen.
That’s a good thing, no doubt. But before your heart swells with gratitude at the generosity shown by your lender, you should know that there has be a law in effect since 1968 that limits consumer liability in the aforementioned circumstances. The Truth in Lending Act caps a cardholder’s accountability for unauthorized purchases at $50 and specifies that you are not required to repay any charges that are made after your contact your card issuer to report your card lost or stolen. So call your credit card company the very instant you realize your card is missing and, at the very worst, you might be out $50.
But $0 liability for unauthorized purchases is one of those “benefits” you get, more or less, no matter what, so don’t let that particular “perk” influence your decision-making process when applying for a credit card.
A co-signer is not necessary.
This is a favorite for cards geared towards college students to flaunt. The words “no co-signer required” imply that all college students applying for a line of credit must have a parent, guardian or other financially-sound adult co-sign on the card to guarantee the debt, thus potentially leading students to believe that they have stumbled upon a super special card that they can apply for on their own. But according to the CARD Act, access to carry a credit card and what the limit will be if granted is dependent upon an applicant’s individual income, not their household’s income.
This rule pertains to anyone applying for a credit card, from college students to adults. If the applicant has their own source of income, they can apply for a card on their own. Is not, a co-signer is mandatory.
So don’t be seduced by unexceptional promises! When shopping around for a new credit card, keep your eyes open for real perks, such as no or low-interest balance transfer offers or a generous award point program.