Finance

American Express has a new credit card called “Clear.” The primary benefit of the card is that there are “absolutely no fees of any kind.”

*MOUSE PRINT: Buried in the terms and conditions is the additional 2% fee they tack onto transactions made in foreign currencies: “Transactions in Foreign Currencies: Transactions made in foreign currencies are subject to a conversion rate. Foreign currency conversion rate is base rate plus 2%, as described in the Cardmember Agreement.”  [AMEX website, April 13, 2006]

To their credit the list of fees they do NOT charge is impressive: late fees, annual fees, over-the-limit fees, balance transfer fees, cash advance fees, dishonored check fees, wire transfer fees, stop payment order fees, and statement copy fees.

Finally, a stock brokerage account where you don’t get charged a ton of fees or high commissions.

The claims: (1) Our commission prices start as low as $9.95  (2) Just say no to account service fees.

*MOUSE PRINT: (1) “$9.95 trade pricing is for clients who have $1 million in qualifying household assets or trade at least 30 times a quarter.”  (2) “Accounts exempt from account service fees are subject to a minimum balance charge of $30 per quarter for brokerage accounts … [if after notice] … assets remain below… $2500.” [US News, April 3, 2006]

I think Charles Schwab is just saying no to little accounts (under $1 million) with respect to the advertised commission rate, and does not consider a “minimum balance charge” to be an “account service fee.”

Finally, an advertiser is offering a product with “no strings attached.” The First National Bank of Ipswich is promoting a relatively high rate of interest for a local bank and is not requiring that you also open any other account to get the low advertised rate. Most people, however, do not qualify to get this deal. Why?

*MOUSE PRINT: “Minimum balance $100,000” [Boston Globe, 3/19/06]

And, since this is a national bank, it only offers deposit insurance from the FDIC (and not from Massachusetts). That means only deposits up to $100,000 are covered by the FDIC. Therefore, any interest you earn that remains in the account will be uninsured.

“No strings” ?