Credit Card Terms

When you receive credit card offers in the mail, examine the fine print before you accept any offer. Review the following items very carefully:

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Annual Percentage Rate (APR) - determine if it varies, how the variation is determined and when can it change.
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Period Rate - This is the interest rate used to figure the finance charge on your balance.
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Annual Fee - Amount you pay to be a cardholder. All cards do not charge an annual fee.
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Grace period - This is the number of days you have to pay your bill before finance charges begin to accrue.
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Finance charges - Most lenders calculate finance charges using an average daily account balance. Look for offers that use an adjustable balance which subtracts your payment from your beginning balance.
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Other fees - Ask about special fees when you get a cash advance, make a late payment or go over your credit limit.

The Fair Credit and Charge Card Disclosure Act requires credit and charge card issuers to include this information on credit applications.

BEWARE OF

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Teaser Rates - these types of rates are low for a short period of time and then escalate to a higher rate on the balance. Sometimes one late payment could cancel the teaser rate.
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Offer to skip a credit payment - If your credit card company invites you to skip a payment without penalty, you may still owe finance charges on your unpaid balance and the interest will probably be added to purchases you made after the due date you skipped.

Be thorough in your examination of all credit card offers; it could save you hundreds or even thousands of dollars.
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