Shopping around for a credit card can save you money on interest and fees. You'll want to find a credit card with features that match your needs.
This information can help you
- Understand the features of credit
- Compare credit card features and
- Know your rights when using your
- File a complaint if you have a
problem with your credit card
How will you use your credit card?
The first step in choosing a credit
card is thinking about how you will use it.
- If you expect to always pay your
monthly bill in full--and other features such as frequent flyer
miles don’t interest you--your best choice may be a card that has no
annual fee and offers a longer grace period.
- If you sometimes carry over a
balance from month to month, you may be more interested in a card
that carries a lower interest rate (stated as an annual percentage
rate, or APR).
- If you expect to use your card to
get cash advances, you’ll want to look for a card that carries a
lower APR and lower fees on cash advances. Some cards charge a
higher APR for cash advances than for purchases.
What's the credit card APR?
The annual percentage rate--APR--is
the way of stating the interest rate you will pay if you carry over
a balance, take out a cash advance, or transfer a balance from
The APR states the interest rate as a yearly rate.
How long is the Grace Period for the
The grace period is the number of
days you have to pay your bill in full without triggering a finance
For example, the credit card company may say that you have
“25 days from the statement date, provided you paid your previous
balance in full by the due date.” The statement date is given on the
The grace period usually applies only to new purchases.
credit cards do not give a grace period for cash advances and
balance transfers. Instead, interest charges start right away.
If you carried over any part of
your balance from the preceding month, you may not have a grace
period for new purchases.
Instead, you may be charged interest as
soon as you make a purchase (in addition to being charged interest
on the earlier balance you have not paid off).
Look on the credit
card application for information about the "method of computing the
balance for purchases" to see if new purchases are included or
Information on methods of computing the balance is in the
section "How is the finance charge calculated?"
These are just some of the
considerations you will have to be aware of when choosing a credit
The bottom line is that you should always read the small print
and think about what it is you are agreeing to and whether or not
this is what you need.