About Credit Cards

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About Credit Cards:

When Applying For Credit Cards! MUST Shop Around For The BEST Value & Benefits:

Values & Benefits can vary greatly: And in some cases, credit cards might seem like great deals until you read the fine print and disclosures. When you’re trying to find the credit card that’s right for you, look at the:

Annual fees: Many issuers charge annual membership or participation fees. Some card issuers assess the fee in monthly installments.

Annual percentage rate (APR): The APR is a measure of the cost of credit, expressed as a yearly interest rate. It must be disclosed before your account can be activated, and it must appear on your account statements. The card issuer also must disclose the “periodic rate”  the rate applied to your outstanding balance to figure the finance charge for each billing period. 

Balance calculation methods: You should understand that credit cards companies use three main balance calculation methods: average daily balance, previous balance, and adjusted balance. The most commonly used method of calculating your balance is the average daily balance. This method adds up your average daily balances for each day during the month, divides the total by the number of days in the month, and multiplies the result by your monthly interest rate (your APR divided by twelve).

Cash advances: Avoid using cash advances? Cash advances are an extremely expensive way to borrow money. Interest begins to accrue as soon as you get a cash advance, because cash advances are not considered normal credit card charges generally, the interest rate charged on cash advances is higher than the interest rate charged on purchases. In addition, there is usually a cash advance fee of between 1.5  and  5  percent of the cash amount advanced.

Compounding period:The compounding period is how often interest is charged to your account. Most credit card company compound interest daily. It’s interesting to note that when you save money, interest is compounded monthly, but when you borrow money interest is compounded daily. Any time you borrow money, remember that you are paying interest, not earning it.

Grace period: The grace period is the number of days you have to pay your billing full without triggering a finance charge. 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. Cards Issuers Companies grace periods may Vary.

Interest rate: Credit card companies state the interest rate as an annual percentage rate, or APR. This is the true, simple, interest rate that is charged over the life of the loan. However, the APR does not take into account compounding periods or the time value of money.

Transaction fees and other charges: Some issuers charge a fee if you use the card to get a cash advance, make a late payment, or exceed your credit limit. Some charge a monthly fee if you use the card or if you don’t.

*”Read the Card’s Terms & Conditions”*

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