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The 63-Page Credit Card Agreement
Saturday, 4th October 2008 (by J.D.)This article is about Credit Cards, Real-Life
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Taking my own advice about how to choose a credit card, I recently signed up for an American Express TrueEarnings card because:
- It doubles as a Costco card.
- It offers 5% cash back on gas.
- It offers 3% cash back on restaurants.
- It offers 2% cash back on travel.
- It offers 1% cash back on many other purchases.
Those all sound like great perks, but the card also comes with an added “bonus”: an eleven-page card agreement. And these aren’t ordinary pages, either.
Because I’m That Kind of Guy, I counted the number of words per line and the number of lines per column. I then compared these numbers to a couple of books at my desk. This eleven-page card agreement, if printed in book form, would be 63 pages long.
Ugh.
Yet because I believe I should never sign anything without reading it, I will not activate this card until I’ve read — and understood, and agreed to — the entire document.
Sixty-three pages of legalese. Can you imagine how painful this is going to be?
47 Responses to “The 63-Page Credit Card Agreement”
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October 4th, 2008 at 6:14 pm
I work for Costco and can vouch for some of this cards great features. It doubles warranty coverage up to adding a full year to electronics purchased using the card (maybe limited to TVs and Computers?). It also adds 90 day coverage for theft or damage of electronics. The interest rate is negotiable based on several factors but they usually have you wait a couple months of payments before they will consider that change.
Keep us updated on your findings, it is one of the two credit cards I have and would be interested in any other pitfalls or benefits to its use!!!!
October 4th, 2008 at 7:01 pm
My father in law also recommended this card to me recently. The card I carry is a Citi Premier Pass … though they just sent me a renewal card and removed my credit limit entirely (gasp!). I don’t carry a balance, but the thought of identity theft is scary (yes, I know your liability is limited if you immediately report loss of the card)
The citi card gives you points, 1 per $1 spent, that you can redeem for gift cards or cash. The return rate is lower than 1% however, by my back of the envelope figuring.
October 4th, 2008 at 7:09 pm
I too just applied for this card. I haven’t received the agreement yet. Please post what you learn. It may save someone some time. I do plan to read it myself (don’t know how much I’ll be able to retain!)
October 4th, 2008 at 7:33 pm
Great card!…and doubles as your Costco Membership card on the back, thus helping to thin the wallet a little. The rebate structure is great for those like myself who spend alot on gas and family travel throughout the year. The rebate check in February is as good as cash, as long as you remain a Costco member — they’ll hand the cash right over at the store.
October 4th, 2008 at 7:44 pm
I have the True Earnings card too and am satisfied with it so far. I like getting the rebate and see it grow from month-to-month. The rebate on gas though is only 3% and not 5%.
October 4th, 2008 at 7:47 pm
holy crap.
October 4th, 2008 at 7:53 pm
My wife and I just did this recently, too. We’re now the proud carriers of an astronomical 18.5% interest rate. Pay your balance every month!
October 4th, 2008 at 8:02 pm
Sounds like a great card! Let us know if there are any gotchas after reading that novel.
October 4th, 2008 at 8:03 pm
Come on, J.D., tell us how much the interest rate will be.
This is a slippery slope, my friend…
October 4th, 2008 at 8:19 pm
you’re a good man, jd
October 4th, 2008 at 8:20 pm
Yay - for the link love
Boo - for the credit card
I like my method of payment to be easy to understand…
this note is legal tender
that’ll do…
rock on,
NCN
October 4th, 2008 at 8:22 pm
Don’t know if it was a typo or what, but when I click the link to the card they tell me there is only 3% on gas, not 5% as you indicate. Interested to see how the novel turns out, as we’re shopping around for a card with good returns as well.
October 4th, 2008 at 8:28 pm
Costco membership is required in order to waive annual fee?
October 4th, 2008 at 8:38 pm
J.D. - I recommend you read the Credit Matters Blog, at http://www.creditmattersblog.com/
There are a ton of great articles there, and I think you will appreciate the information a great deal.
October 4th, 2008 at 8:42 pm
Ha!! I think i might have passed on the card just to avoid the tedious reading.. But what would we ever do without plastic money.
October 4th, 2008 at 8:48 pm
To be honest, I have no idea what the interest rate is. I WILL NOT CARRY A BALANCE. Also, I just realized, this is a BUSINESS card, which means I won’t be getting gas discounts. That is unless GRS can find a way to buy a Mini!
October 4th, 2008 at 8:49 pm
LOL!
There HAS to be a way, J.D.!
October 4th, 2008 at 8:51 pm
The 5% came directly from the piece of paper the card is stuck to.
October 4th, 2008 at 8:55 pm
Costco business gets a 5% gas rebate, while their non-business card gets 3% on gas (I believe).
October 5th, 2008 at 12:05 am
This reminds me of when I signed for my ING savings account (mostly because of the good reviews here!). I remember that their legal documents were more readable than most others and they even sprinkled it with little jokes (like “Now comes the *real* hardcore legalese”).
I’m like you JD, for anything more than a stupid software program I just can’t sign up without reading the entire agreement. It can suck sometimes!
October 5th, 2008 at 12:16 am
It’s American Express though. Not everywhere takes it. Otherwise, good rewards program. If interested in rewards, Capital One’s VISA is a good option.
October 5th, 2008 at 12:30 am
I’m not sure what the benefit of this card is over the Blue Cash card other than replacing the Costco card in your wallet. I suppose if you won’t reach the spending minimum on the Blue Cash, True Earnings has better reward rates.
Funny. I never know any of my card’s interest rates either.
October 5th, 2008 at 1:06 am
Chances are, once you read and understand the legalese, you won’t want to activate the card.
October 5th, 2008 at 1:43 am
This is a great card, we have the business one that returns 5% on gas. We run two business trucks and so far our refund is $260, and we still have 4 months to go until the rebate is calculated for this year. Plus, Costco gas always meets or beats the lowest price for gas in our area, at times by as much as 20 cents per gallon. I never worry about the quality, and the location is reasonably close. I admit, I only scanned the agreement, but if you pay in full each month, it appears to be problem free. When I add this to my 2% refund from Costco, it will be a serious rebate for shopping at what would my first choice of stores anyhow.
If you have the personal card it only returns 3%, but you can also use it for household purchases at Costco were you get another 1%, in addition to the 2% already being returned by your membership. Not as good as the business card for gas, but still a nice return on what is generally the best buy anyhow.
October 5th, 2008 at 6:00 am
I’m sure they’re hoping it’ll look too long and complicated for people to actually read!
October 5th, 2008 at 6:12 am
Before reading the fine print, check the places where you plan to use your card. American Express charges the merchants a higher fee than other credit cards, so not everyone accepts it. This is true of smaller places who are trying to keep their cost down
October 5th, 2008 at 8:15 am
We have the same card from Costco and use it for our business trucks. In just a few months, we’ve accumulated $300+ that’s going to come back to us. You do have to pay it off every month to realize the return.
October 5th, 2008 at 9:26 am
Resist! Resist! Is it worth your precious time to have another card - one that requires so much reading? you can save even more $ by not going to the restaurants or doing the traveling! don’t mind me - I never go to Costco, eat out (much) or travel (much) - at least not enough to make this signup worth it. I think I’ll go make some bread
October 5th, 2008 at 11:26 am
I have to disagree with the posters who say not to use a card for member rewards. It seems to be knee-jerk reactionism or part of a rather extremist world view to be saying no to all cards, any cards, any time, any where!
A responsible person can easily reap the rewards with little risk. I’ve been using rewards cards similar to this for years without ever having a problem (I always have enough in my bank account to pay off all my balances ahead of actual charges; my spending doesn’t vary much). And using rewards cards wisely gives a person a serious advantage; I usually get back $100-$150/mo from Amex and Chase. Of course, this comes out of the merchants’ pockets thru transaction fees, not out of credit card issuer’s, but it’s a dog eat dog world
I should point out I also play the credit card arbitrage game with no problems as well. I’ve been shifting $10,000 around for almost 3yrs now and have yet to pay a penny of interest.
You CAN beat finance companies at their own game, provided you’re an educated and responsible consumer. Generally, it’s the irresponsible or deliberately ignorant people (or in a teenie number of cases the extremely unfortunate) who get burned.
October 5th, 2008 at 11:40 am
Pretty much two trips within a year will pay for your Costco membership. If you are really as frugal as you say then you would be shopping there a lot more than never.
October 5th, 2008 at 1:21 pm
Around here (central Oregon), gas stations charge extra if you pay with a credit card. So the 3% “savings” may be pointless.
October 5th, 2008 at 2:52 pm
I’ll be interested to hear about what the eleven pages consists of. Legalize always makes me cringe…good luck with it!
October 5th, 2008 at 2:57 pm
I am with Tyler (a few posts up). Rather than disavow all credit cards, why not just exercise some self control? Why not milk credit cards for all they are worth? I pay in full, so I pay no interest on my cards.
Credit cards are tools. Nothing more. If you don’t have the cash to back them up, though, you’re asking for trouble. I see more people get in trouble when they use the credit card to supplement their income. That’s a mistake.
But when you are using the cards for cash back (and other kinds of rewards), I see absolutely nothing wrong with that.
Personal responsibility is the name of the game.
October 5th, 2008 at 5:03 pm
Did you notice the part where it says you can use the card only for business expenses?
October 5th, 2008 at 7:17 pm
I should sue since I love Costco, I hate AMEX, I own Visa stock, and all my cards are Mastercard. I have also been reading entire credit card statements lately too, because I need to start practicing what I preach. Since my new medium sized LCD TV was broken, I’m glad I read the agreement in order to file a claim.
I guess since I get 1% on my debit card and because I’m an Executive Costco member and get rebate, I guess that is consolation enough.
October 6th, 2008 at 6:35 am
I’m so glad that you’re taking the time to read through the agreement thoroughly. I’ve had times when I’ve been asked to sign an agreement at a store or place of business, adn have sat down, asked for a glass of water, and read through there and then to make sure that I properly understand what I’m getting myself into.
One place looked at me kind of strange, then the salesperson sneered at me, and made a big deal of answering questions when I asked them (hey, I did one year of pre-Law at uni, but I know NOTHING about contracts!). needless to say, I neither singed the agreement, or ever used their services again.
Good on you, and good luck getting through it all!
October 6th, 2008 at 6:41 am
Careful. I was shocked to discover there seemed to be no ‘grace period’ and interest on my costco purchases seemed to begin accruing as soon as the charge was registered. Even when i paid in full i was charged interest. I now go online and pay within a few days of making each charge. I only use this for costco purchases because it is convenient to have one card and not have to remember my checkbook when i go. Maybe the type of card you have is different, but watch what your 2nd statement says about interest accrued on the first month’s purchases.
October 6th, 2008 at 8:50 am
Why? Know the interest rate, and the grace period. Know if there’s an annual fee, and what the rewards terms are, if any. But as long as you don’t plan on carrying a balance what is reading through all of that going to gain you? Make the CC work for you, not the other way around.
That said, I’d love to be able to use an AMEX - they’re Blue Cash is unlimited, whereas my Chase Rewards card Visa is capped at $300 a year. However, in podunk mid-Michigan, AMEX can’t be guaranteed to be accepted everywhere, so that makes it annoying.
October 6th, 2008 at 9:33 am
Haha.. 63 pages is incredible.. and exactly the reason why I’ve been putting off my own search for a card.
October 6th, 2008 at 5:59 pm
# Cindy Marsch Says:
October 5th, 2008 at 5:03 pm
Did you notice the part where it says you can use the card only for business expenses?
Is this true? How do they know if it is a business purchase or not?
October 6th, 2008 at 11:29 pm
J.D. -
Personal credit cards have consumer protections in place, by law, that make them a very great choice for consumers who use them wisely if there’s ever a dispute.
Business credit cards are a different animal, like business bank accounts. You are a business, so you are expected to behave like a business and are held to the same rules that a business would be. So you likely won’t have chargeback or dispute rights if there’s a problem you have with something you bought on your card. If your card is stolen, you may not have the same protection that a consumer would in that same scenario. So do read the card agreement carefully.
There are many benefits to having a business credit card (or several), but if you’re looking for the protections that come as part of consumer cards, then get a personal card.
October 7th, 2008 at 6:25 am
No, I can’t imaging that; I’m too busy thinking that the benefits can’t possibly be worth the costs. “Penny wise and…
October 7th, 2008 at 9:02 am
I laugh at you naysayers who are advising JD to stay away from the card or saying that it has to be too good to be true. You could not be more wrong.
I’ve had the card for over 2 years now, and I get $150 plus a year cash back. Never had a problem. I pay it off every month. Yeah, not everywhere takes Amex, but that’s why you carry a VISA or MC as well. The benefits DO, in fact, outweigh the costs. There are no costs. Buy stuff. Pay off your balance monthly. Get money back.
Just because fire has the potential to burn a person does not mean that in any and all situations fire should be avoided. Fire is an incredibly useful tool that when used correctly, gives huge benefits to man. Likewise, credit cards, when used properly can be very beneficial. Until Uncle Sam starts giving me money to use cash, I’ll stick to using credit cards and get some money back for purchases I have to make anyway.
October 7th, 2008 at 1:28 pm
Congrats on branching back out onto the credit card tree, JD. I’ll be interested to see if you find anything shocking with your fine tooth comb.
Very impressed that you counted number of words per line. Well done.
October 7th, 2008 at 10:09 pm
Oh, JD, please write a blog post about your experience in tackling that agreement form! I want to know how long it took, if you needed help or research to break it down, and maybe hints on how to tackle one myself.
October 8th, 2008 at 3:27 pm
I have been using Costco card for the last 9 months. Pay up in full every month. No issues so far. I have accumulated about $90 in rewards. I shop and fill gas from Costco and use it for other purchases as well. I did not have the patience to read the agreement. I think that they are covering themselves from “TV Attorneys” suing them.
October 8th, 2008 at 10:55 pm
Ha! I had to stumble this page because it cracked me up. I agree that this card is a great choice! And gotta love the Costco bonus. Anything to take one more piece of plastic out of my wallet. When I received that document of theirs it sat on my desk for weeks collecting dust. I dreaded having to read it. Though I broke down and skim read the dang thing. Can’t let those major corporations get the best of us eh? keep up the great articles!