In an attempt to distinguish themselves from the myriad credit card offers designed to attract suitable consumers, some card issuers are enhancing the rewards tied to their specific cards. However, those on the hunt for a new credit card should pay extra attention: some of the benefits that certain companies emphasize they provide are indeed legally required. To put it simply, some lenders are craftily creating the illusion that they’re granting you something exceptional that they are, in reality, obliged to give. So, when you come across these two “rewards” presented in bold print and followed by many exclamation marks, try to control your excitement.
1. $0 liability for unauthorized purchases if your card is lost or stolen: While this sounds great, it’s essential to know that a law since 1968 (The Truth in Lending Act) has limited consumer responsibility for such events. This law confirms that one isn’t obliged to repay any transactions made after reporting the card as lost or stolen to the credit card company. So, in the worst-case scenario, you might lose $50. Essentially, $0 liability for unauthorized transactions is a standard benefit, so don’t let it sway your decision when applying for a credit card.
2. No need for a co-signer: Credit cards for college students often feature this. The phrase “no co-signer required” can lead students to believe they’ve found a unique card they can apply for independently. However, as per the CARD Act, ability to carry a credit card and the given limit depend on the applicant’s personal income. This rule applies to all credit card applicants. If the applicant has personal income, they can apply independently; otherwise, a co-signer is required.
Always be smart when shopping for a credit card. Don’t be lured by trivial promises – instead, look for actual benefits like low or no-interest balance transfer offers or a generous point reward program.
