Anne-Marie Saint-John, Alva, Long Island City, NY >
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:
Additionally, check if your APR is fixed or variable.
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.
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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.
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.
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.
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:
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.