Anne-Marie Saint-John, Alva, Long Island City, NY >

Everything You Need to Know about your Credit Card

Traditional bank credit is increasingly difficult to access. This is why many people are turning to credit cards to finance their expenses. Still, take the time to carefully review the fine print of your credit card agreement to avoid some common risks such as unexpected charges. The guidelines below will help you make a more informed decision.

Annualized Interest Rate (APR)

This is a crucial term to understand your credit card agreement. The APR is the annual cost of borrowing money with a credit card. Examples of different APRs include:

  • Step APR, which implies higher interest when balances exceed a certain amount.
  • Introductory APR, which rises after a certain period of time has passed
  • APR for cash advances or when an account is delinquent is usually higher than the regular APR.

Additionally, check if your APR is fixed or variable.

  • A fixed-rate is constant from month to month.
  • A variable rate is determined based on changes in another rate, which is usually determined by the Federal Reserve. Variable interest usually takes the form of “premium rate + 5.99%.” If you are applying for a variable rate credit card, make sure you know how often the base rate changes and by how much it changes.

Universal Mora

This is a classic and deceptive way to raise your interest rate even if you have a perfect payment history on your card. Credit card issuers sometimes do not include this condition in contracts, but the condition may exist.

  • If you fall behind on a payment with another credit card (such as a phone, car, or even a rent or mortgage payment), other credit issuers will change their own interest rates when they know you are behind on another. bill.
  • They can raise the APR to a level of 30% and will often lower your credit limit. Therefore, it is important that you have a good credit score at all times.
  • Although some banks have prohibited this practice, others still rely on this method while the economic crisis continues.


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Grace period

A grace period is the time you’re allowed to wait to make your bill payment without incurring finance charges. Usually, the time frame for this is 25 days, but it may be shorter.

  • Make an effort to pay your balance in full and on time each month. If you do not pay the entire balance, you will have to pay interest and fees on the portion that you leave unpaid.
  • A single late payment can send your APR through the roof, such as 9% to 21%! 

Minimum Payment

This is the amount of money your credit card issuer requires you to pay each month. If you cannot pay your balance in full, pay as much as you can, and definitely more than the minimum required. This will reduce what you pay in interest and fees.

  • An added benefit of doing this is that paying twice your minimum or more can drastically shorten the time it takes to pay off your balance in full, saving you money on interest. By just paying $ 10 above the minimum monthly interest, you can save a lot of money.

Annual Fee

Some credit card issuers charge annual fees just because you have their card. Pay attention to the annual amount they charge you or alternatively, consider opening one of the many credit cards that do not charge any annual fees.

Miscellaneous Charges

Credit card issuers often do not disclose the other extra charges that come with the card. Be sure to read the fine print on the contracts so you have all the information. Try to open cards that do not have the following fees:

  • Balance Transfer – When balances are transferred from one card to another, transactions can cost up to 4% of the transfer amount.
  • Cash Advances – These fees occur when you are taking out a cash loan using your line of credit, for which they will typically charge you higher interest. These loans usually do not have a grace period.
  • Going over the maximum limits: do not run the risk of going over the limit on your credit card, as doing so will charge you a fee. In fact, never use your card for more than 50% of the maximum limit, because if you do, your credit score will go down.
  • Bounced Check Fees – Fees charged when a check bounces when making a credit card payment.

Practical advice

If you receive credit card offers in the mail, take five minutes to compare and contrast the various terms and conditions in the contracts. For each of the charges listed above, put a score for each card and see which card comes out winning in the end. This will help you make a better choice for your new credit card.

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