Study Credit Card Rates Before Choosing A Credit Card
You've made up your mind to shop around for a new credit card. But what should you look for when comparing credit card deals? Use the following guide to decipher the fine print found in credit card terms because not all cards are created equal.
Look at all credit card rates
The first thing most people want to know when comparing credit card deals is what is the interest rate? When looking at credit card rates, it's important to get the annual percentage rate (APR). The APR is the interest rate you pay on an annual basis when carrying over balances from month to month. The APR may vary based upon the prime rate.
When reading the credit card terms you may see several APRs listed. The APR you actually receive depends upon things such as your credit score, income, and current debt. You also may see an introductory APR that only lasts for a few months, a balance transfer APR, and a rate for cash advances.
Cash advance and balance transfer APRs are often higher than the rate for regular purchases. Balance transfers and cash advances usually involve a fee in addition to the higher APR. Even if you get credit card offers for 0% APR on balance transfers, you should expect to pay a fee.
Penalty APRCredit card companies will generally impose a penalty APR, which is higher than the regular rate, if you miss two or more consecutive payments. However, some card issuers have the ability to raise your rate if you are even one day late. Your credit card rate also may be increased if you go over the credit limit or have a payment returned. If a penalty APR goes into effect, the credit card company must disclose how long the penalty APR will last, provided all minimum payments are made on time.
Avoid paying interestJust because you use a credit card doesn't mean you have to get stuck with huge interest payments. Get in the practice of paying off your credit card bill in full each month and you won't pay interest. If you carry a balance each month, you end up paying interest even if the balance is very small. That's because most credit card companies have a minimum interest charge.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV