Some Credit Card Basics By Bobbie McKee.. Many people get in trouble with cards because they don't fully understand how the card works. Most people only know that they get a piece of plastic in the mail that they can use to swipe in stores and pay the bill later. Understanding how cards work can help you use them responsibly.
Credit card companies make money when you pay interest. The company determines the amount of interest you pay each month by using the annual percentage rage, or APR. There are two basic kinds of APRs: fixed and variable. A fixed APR doesn't vary much over a period of time. Should your card company change the APR, they must inform you before it is increased. The variable APR can change from time to time. You can find out which kind of APR you have by looking at your card application.
The grace period is the number of days that you can pay off your card balance without receiving a finance charge. In most cases, the grace period only applies to new purchases that you make. If you already have a balance on your card from a previous month, new purchases will not have a grace period. Your grace period is usually printed on your monthly card statement.
In some situations, your card may have certain fees associated. The annual fee is a yearly fee you must pay for having the card. The late-payment fee is charged when the card company receives your payment after the due date. If you use your card for a cash advance you can be charged a cash advance fee that is either a flat fee or a percentage of your advance. A balance-transfer fee is incurred when you transfer a balance from another card. Should you go over your limit you could be charged an over-the-credit-limit fee.
Many card companies offer incentives for the use of their card. The most common type of incentive is a rebate on the purchases you have made. This rebate is sometimes is made in cash (via check) or as a to your card account. Frequent flier miles, car rental insurance, and travel accident insurance are other incentives that are offered. Another
feature offered by many cards is insurance that covers payments to your balance should you become disabled or unemployed.
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n 1: approval; "give her recognition for trying"; "he was given credit for his work"; "it is to her credit that she tried"; "the credits were given at the end of the film" [syn: recognition]
: Credit Card Application “There are some things money can't buy. For everything else, there's MasterCard.”This is just a slogan but holds a valuable massage which shows world is growing at a much higher pace than it ever Read more...
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