Credit Card Comparisons
Shopping around for a credit card can save you money on interest
and fees. You'll want to find one with features that match your
needs. This information can help you
- Understand the features of credit cards - Compare credit card
features and costs - Know your rights when using your credit
card - File a complaint if you have a problem with your credit
card
How will you use your card?
The first step in choosing a credit card is thinking about how
you will use it.
- If you expect to always pay your monthly bill in full--and
other features such as frequent flyer miles don't interest
you--your best choice may be a card that has no annual fee and
offers a longer grace period. - If you sometimes carry over a
balance from month to month, you may be more interested in a
card that carries a lower interest rate (stated as an annual
percentage rate, or APR). - If you expect to use your card to
get cash advances, you'll want to look for a card that carries a
lower APR and lower fees on cash advances. Some cards charge a
higher APR for cash advances than for purchases.
What's the APR?
The annual percentage rate--APR--is
the way of stating the interest rate you will pay if you carry
over a balance, take out a cash advance, or transfer a balance
from another card. The APR states the interest rate as a yearly
rate.
How long is the Grace Period?
The grace period is the number of days you have to pay your bill
in 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." The statement date is given on the bill. The
grace period usually applies only to new purchases. Most credit
cards do not give a grace period for cash advances and balance
transfers. Instead, interest charges start right away.
If you carried over any part of your balance from the preceding
month, you may not have a grace period for new purchases.
Instead, you may be charged interest as soon as you make a
purchase (in addition to being charged interest on the earlier
balance you have not paid off). Look on the credit card
application for information about the "method of computing the
balance for purchases" to see if new purchases are included or
excluded. Information on methods of computing the balance is in
the section "How is the finance charge calculated?"
These are just some of the considerations you will have to be
aware of when choosing a credit card. The bottom line is that
you should always read the small print and think about what it
is you are agreeing to and whether or not this is what you need.