Below are some common terms used in credit card agreements:Annual Fee: A yearly fee that a credit card charges for using the card. Many cards charge no annual fee, but others such as American Express, chase credit cards and those offering substantial reward programs may have such a fee. Annual fees may range widely. The consumer should always look for credit cards that do not charge any annual fee. Check out some of the top No annual fee credit cards deals here. APR (Annual Percentage
Rate): This is your card's
interest rate for a year. If you have a card with an APR of 16%, you will
actually be charged a daily interest rate of .044% (16% divided by 365
days), as credit cards Available Credit: Credit line minus the balance on your card. If you have a credit line of $5000 and have made $2000 worth of purchases, your available credit is $3000. Balance Transfer:
It is an enticement to you as a new customer, the banks will often allow
you to transfer your existing balance to the new card at an extremely low
interest rate (sometimes as low as 0%) for a specified period of time. For
example, if you are carrying a balance of $1000 on a card with an APR of
19.0% and
Cash Advance: Allows you to use your credit card in an ATM to get cash immediately. Credit cards offer no grace period on cash advances, and the APR on a cash advance is generally much higher than the APR on purchases. Cash Back or Reward Credit Cards: Credit cards that offer you some sort of reward for using them. Some cards offer you cash as a percentage of your purchases made with the card, usually a small amount topping out at 1%. There are however credit card offers available online today that pay as high as 6% on your retail and gas purchases. Other cards offer incentives such as air miles, or cash back based on your account activity. Credit Line: How much you can charge to your card. If you have a credit line of $5000, you can buy $5000 worth of stuff. Your cash advance limit can be smaller than your overall credit line. If you exceed the credit limit, you can be charged over-the-limit fee! Fixed Rate: Fixed rate is APR that will not change. If a card offers a fixed rate, you know that your rate will remain the same for the length of the credit card agreement (although terms could change in the future.) Contrast this with the Variable Rate definition below. Grace Period:
The length of time in which your new purchases will not be charged
interest if you pay off your balance in full. If you buy something with
your credit card today, then pay off your
Secured Credit Cards: Cards for people with a bad credit history or no credit history at all. Secured cards , unlike unsecured credit cards, work basically as debit cards--you put money into an account and your purchases with the card are made against that money. There are also partially secured cards--for example, if you put $3000 into your account, your credit line may go up to $4500--and unsecured cards that do not require a deposit but charge high fees. Any type of secured card will charge you higher fees than a card for people with a good credit record, but it may be necessary to get this type of card if you don't qualify for other cards. Top-credit-cards.com (secured Credit Cards ); creditcardsangel.com (credit cards); mycoolcards.com (credit cards ); cool-credit-cards.com (credit Cards) and 5creditcards.com (credit cards) are some of the websites offering some of the best deals for secured credit cards online. Variable Rate: An APR that changes as published interest rates change. Many credit cards with variable rates will use an APR calculation of (Prime Rate + card interest). |
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