It is very important for you to handle a credit card wisely. In order to handle a product confidently you need to have a thorough knowledge about it. The same is applicable for a credit card. In order to handle it properly and to your maximum benefit know the terminologies attached to it. Once you are familiar with the terms and their utilities you will definitely be more confident while carrying it. In a few of our articles we have provided many tips and tricks with credit card, but you can apply it only when you are accustomed with the terminologies attached to it. Concentrate for a few minutes and have a clear understanding of these terms.
Annual Percentage Rate (APR)
Annual Percentage Rate is one of the most commonly used words or I must say the most important word while dealing with credit cards. APR is a measure of the cost of credit, expressed as a yearly interest rate. Check out the "periodic rate" too. That's the rate the issuer applies to your outstanding balance to figure the finance charge for each billing period. You may think you know what the bank is charging you for the use of their money, but you might be surprised to find that terms have changed and you're now paying as much as 18 to 20%. The US average is around 18%, and we think it to be much more than what you are actually entitled to pay. If your current rate is 18%, you can force your bank to drop its rate to something as low as 10%. This way you save a lot of money. A dollar saved is more than a dollar earned.
The meaning of the word states by itself that it is an annual fee, and it is charged on yearly basis. Many credit card issuers charge an annual fee for granting you credit, typically $15 to $55. Some issuers charge no annual fee. The amount charge varies from one issuer to another.
This is another important attribute of credit card. This is the time between the date of a purchase and the date interest starts being charged on that purchase. If your card has a standard grace period you have an opportunity to avoid finance charges by paying your current balance in full. Some issuers allow a grace period for new purchases even if you do not pay your balance in full every month. If there is no grace period, the issuer imposes a finance charge from the date you use your card or from the date each transaction is posted to your account. Most of the people prefer credit card with some grace period as this way they can avoid interest and can try to pay on time.
Some issuers charge a fee if you use the card to get a cash advance, if you fail to make a payment on time or if you exceed your credit limit. Some may charge a flat fee every month whether you use the card or not. The type of transaction fees depends on the credit card company. In this world you don't get anything for free, if they offer you some additional facilities they too will charge you some extra money may be directly or indirectly.
Insurance, credit card protection, discounts, rebates and special merchandise offers- these are some extra or additional benefits provided to you. This also varies from one company to the other.
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