How Scrolling Fine Print Can Hurt Your Wallet

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When you buy something on a payment plan or sign up for a service, it’s common to have to sign a contract. The problem is that these contracts are often long and complex — and contain a lot of fine print. The salesperson will probably try to wrap things up for you so you don’t have to spend hours reading, but if you’re not careful, you might unwittingly agree to something unfavorable that will cost you money.

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“When I was fresh out of college, I signed up for DirecTV because I wanted to watch real TV without ‘bunny ears,'” said Matthew Robbs of Smart Savings Tips. “The price was reasonable and the contract was for two years. However, what I missed in the fine print was that the monthly cost almost doubled by the end of the first year. And since I was locked into a two-year contract, I had to continue paying that higher price for the entire second year.

To find out more, GOBankingRates interviewed a consumer analyst. Here’s how ignoring the fine print could cost you and when you should be extra careful.

Financial Concerns in the Fine Print

“You sign an agreement, even if it’s just ticking a box to say you’ve read it,” said consumer analyst Julie Ramhold with DealNews. “And that means you legally agree to everything contained in said agreement, which could expose you to random fees and penalties. By slowing down and reading the agreement, you’ll be able to avoid anything that might get you in trouble later.

She added, “Don’t be afraid to ask for explanations either. For example, if you’re signing a new apartment lease and something isn’t in the fine print, don’t be afraid to ask for a better explanation to clear up any misunderstandings ahead of time. As for why this is important for your wallet, it means being aware of the potential fees and penalties you could incur, so it’s definitely worth (literally) taking your time and reading an agreement so you’re not blinded by the extra costs you weren’t counting on.

Here are some examples of fine print terms that should trigger a warning that you should pay close attention to.

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Interest rate

“Especially if they’re fixed or variable,” Ramhold said. “You’ll want to know if you have an introductory rate that’s lower but will increase after a while, or if your rates are variable and subject to change from the start before you start making purchases with credit or debit cards. try to take out a loan.

Cash advance rate

Ramhold warned to read the fine print if you ever decide to take a cash advance on your credit card. When you receive money from a credit card, there is usually a 3%-5% cash advance fee and the cash advance APR can exceed the regular purchase APR.

“When you get cash advances, you obviously have to repay that discount, so you’ll want to know what kind of rate to expect to know how much you’re going to repay on top of the original advance amount,” she said. . .

Consequences of missing or skipping a booked flight

“In some cases, your entire ticket may become void if you miss or skip a booked flight, leaving you stranded,” Ramhold said. “So you’ll want to know what’s going on and whether you’ll potentially have to rebook if that happens.”

What happens if you are bumped from a booked flight

“If you’re kicked out of your flight, you’re usually entitled to some kind of financial compensation for your problem,” Ramhold advised. “By reading the fine print when you book your flight, you will know what action to take should this happen to you and what to expect.”

Warranties

Ramhold said: “Often warranties only cover certain parts of a product or situations that are abnormal, not typical wear and tear, so it’s important to know what warranties cover and where they end in order to ‘Avoid paying for repairs you shouldn’t have to – as well as knowing when you’ll be expected to shell out money.

Eligibility

“Whether it’s a particular offer or something else you’re hoping to qualify for, the fine print is key to seeing if you’re eligible for something,” Ramhold said. “It can save you a lot of time and stress down the road knowing up front if you will be eligible or if it is likely that you will not be eligible at all.”

While finding out you don’t qualify for something probably won’t result in an expense directly, it could result in an indirect expense. For example, if you decide to refinance your old car with high mileage at a lower interest rate because you’ll save a hundred dollars a month and commit those savings to another expense before you get the loan, that could be turn against you.

When refinancing a vehicle, the fine print may state that the vehicle must be no more than 10 years old and have less than 100,000 miles – so keep an eye out for these stipulations.

Free Trial Bonds

“The fine print on these is especially important if you’re trying out a service and not sure you’ll stick with it,” Ramhold said. “Many of them require you to enter certain payment information when you sign up, which means that if you forget to cancel the trial before it’s over, you’ll automatically be charged for another term of service. .”

She continued, “If you want to cancel your trial, it’s best to do so a few days or even a week before it ends because it can take a few days or more to process the cancellation, and you don’t want to being stuck with a service you’re not sold on for longer.

Supposedly free services

“Some retailers will add additional services such as warranties or in-home repairs and use sleazy wording to make the choice seem like a completely free service,” Ramhold said. “However, if you read the fine print carefully, you will find that you agree to pay a monthly fee (or large one-time fee) for this ‘free’ service. In reality, you could get a free month’s subscription, but then you’ll be stuck throwing money away every month after that until you cancel the service.

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About the Author

Cynthia Measom is a personal finance writer and editor with over 12 years of collective experience. His articles have appeared in MSN, AOL, Yahoo Finance, INSIDER, Houston Chronicle, The Seattle Times and The Network Journal. She attended the University of Texas at Austin and earned a Bachelor of Arts in English.

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