HOW MUCH? credit card

Credit cards - how to compare them and choose one that's right for you.

   
 

Decide how will you use a new credit card.

First you have to make a decision how you will use your credit card:

If you are always going to pay your monthly bill in full, and other features don’t interest you, the best choice may be a card with no annual fee and and a long grace period.

On the other hand, If from time to time you will carry a balance for a few months, the better choice would be a credit card with lower interest rate. If you think that you are going to use the card for cash advances, you need a card that offers lower annual percentage rate(APR) and has low fees on cash advances.
Almost all credit cards charge much higher rates for cash advances than for regular purchases.

Annual Percentage Rate - one card, different APR's.

  • APR for purchases
  • APP for cash advances
  • APR for balance transfers
  • Tiered APRs are different interest rates applied to the card's balance - the higher the balance the higher rate.
  • Penalty APR is a special higher rate triggered by a late payment or other event, which in view of the credit card company, makes you a higher risk.
  • Introductory APR and delayed APR are unusually low annual percentage rates for a specified period of time.

The grace period is the number of days until a finance charge is being added. The most common grace period is 25 days, but some cards offer longer(or shorter, even none) grace periods. If the balance is paid in full within the grace period, no finance charge is added.

Many credit cards do not give you any grace period if you carry a balances, and there is usually no grace period for balance transfers and cash advances.

Most credit card companies offer three different types of credit cards:

  • Secured cards, which require a security deposit equal to the credit limit. Secured cards are usually offered to people who have bad credit or no credit at all.
  • Regular cards for people with fair or "almost" good credit score.
  • Premium cards like platinum, titanium, etc. offer high credit limits and have special features: warranties, travel and car rental insurance, cash back bonuses, frequent flyer miles, emergency services.

Choosing The Right Credit Card
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Credit card liability limits.

It is important to note that all credit card holders are protected by the federal law(Truth in Lending Act) In case the credit card is stolen, lost or used without your permission you are only liable for the first $50.

Related topics: prepaid credit card, credit card fees, secure cards.

 

 

 

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