The fine print
Understanding the terms
of your credit card
is important in order to maintain your financial
health. The terms and conditions will vary depending on your credit card
issuer, but we'll explain basic terms and conditions in this section.
You also can call your credit card issuer
if you have any questions
about your terms and conditions.
Annual percentage rate
The annual percentage rate
varies by credit card. Many card issuers
will offer introductory offers as low as 0% for a limited time, but you
could jeopardize that offer if your payment is ever late
account goes over your credit limit
. Remember that rates that are
"too good to be true" usually expire after a short time and much higher
rates then go into effect.
Grace period for purchases
The grace period varies from 20 days to 25 days depending on the card issuer.
The finance charge applies after the grace period ends if the balance isn't
paid in full.
Many card issuers do not charge an annual fee
, but it's always a
good idea to see if the card issuer does before you accept the credit card
Minimum finance charge
If you carry a balance on your credit card, you will accrue a finance
. Depending on the interest rate
and your credit card company's
policy, you will be charged a certain percentage of the outstanding balance
(and sometimes a percentage for any new purchases as well).
In the case of a very small balance
, a minimum finance charge will
be billed to you instead of the actual interest rate. In other words,
if you had a balance of $5 on your credit card and the finance charge
is 4% of your total balance, you will not be charged $ .20, you will be
charged a minimum of $ .50. The minimum finance charge for most credit
card companies is somewhere between a total of $.50 to $1.
Always investigate your card's minimum finance charge because it can add
to your monthly balance. Please read your service agreement for details.
Transaction fee for cash advances
You'll want to keep your cash advances to a minimum because several additional
fees can be attached to this transaction, such as teller fees and transaction
fees up to 3%. In most cases a grace period will not apply to the transaction.
Over limit fee
Having your credit card balance over the limit
can cause problems
too. Card issuers can charge you up to $29 every time your card is over
the limit, and sometimes paying only the minimum balance will not put you
back under your credit limit. Avoid spending to your credit limit on any
account. Not only do you risk over-limit charges, but using all (and more)
of your available credit is viewed negatively by lenders.