In the last few days I mentioned about the Banking Code’s small print, and the fact that it lets the banks get away with a few dodgy tactics.
The financial industry is littered with jargon and confusing terminology, and a lot of this can be found in the small print for products that you must agree to before buying them.
The Motley Fool has put together a great article on how to read small print quickly, which breaks down the things you should look for when negotiating credit card, loan, mortgage and savings account small print:
look in the terms and conditions for the box that neatly summarises key features: a Summary Box in fact. (Sometimes it’s in a separate document to the terms and conditions.) Here you’ll see the interest rates they charge on purchases, cash advances (or cash transactions), balance transfers and the dreaded credit card cheques.
The TAR is better than the Annual Percentage Rate (APR – the interest rate), because the APR can be calculated in different ways. This means that a lower APR may actually cost you more, so it’s misleading.
No one wants to mess up on the small print for their own home. The best shortcut is to give a list of questions to potential providers…
Look for the Annual Equivalent Rate (AER), not the gross rate, as it provides a more accurate reflection of the interest you’ll receive in a year, and all providers are obliged to display it.
It’s a great article to read if you’re unsure about some financial terminology.