Credit Card Basics 101
Understanding the Credit Card Basics
If you’re going to find the best credit card for you, you’re going to need to understand the credit card basics. From the credit card terms and conditions to the APR, you’re going to need to know the lingo in order to navigate your way through the maze of credit card offers out there. Worry not. We’ve got the information you need.
Annual Fees
The annual fee is a fee charged by a credit card company for holding their card. This fee is charged on a yearly basis and is somewhat like a membership fee.
APR or Annual Percentage Rate
The APR of a credit card is how much the credit card is going to cost you on an annual basis. This interest rate, expressed on an annual basis, must be disclosed to you prior to you applying for the credit card. However, just because the APR must be disclosed to you prior to your acceptance of the card does not mean that your APR will remain at that rate for the life of the card. APRs can and do change, so even if you have an initially low APR, doesn’t mean that it will remain that low permanently.
Grace Period
The grace period of a credit card is the period of time your credit card company gives you in order to avoid interest charges. Remember, if your credit card company offers you a grace period, your credit card company must mail you the bill at least 14 days prior to your due date so you can pay the bill on time. However, it’s not a requirement for a credit card company to offer a grace period.
Terms and Conditions
All credit cards come with their associated terms and conditions. The terms and conditions of a credit card can be found on the application that you fill out prior to receiving the credit card. You can also contact your credit card company and ask them for a copy of their terms and conditions at any time.
Transaction Fees
Most credit card companies come with associated transaction fees. These include fees like late payment fees, cash advance fees, over the credit limit fees, etc. Make sure you know what transaction fees are associated with your credit card.