We know that there are so many types of credit cards being offered nowadays. They are standard ,supplementary , Platinum and Gold and Classic credit card for us to choose from. Before you start signing on for a new card from the bank, you should know all the features, terms and fees that come with each card.
Below are few terms you should take into consideration before appy a new credit card.
Credit Line/Credit Limit
It known as the maximum amount of credit you can use on your card. All charges will include purchases, cash advances, balance transfers, finance charges and various fees. If you exceed the credit limit that the card allow while using the card, your card will decline, you are required to request a extra limit line and you have to pay a specified amount of fee.
Balance:
The total amount of all purchases, finance charges and fees that are charged for that particular month. If you have high amount of balance, your available credit will decrease unless you gave a no-limit or a charge card. Note that high outstanding balance may increase your credit utilization and can lower down your credit score.
Annual Percentage Rate: This interest rate will apply once the balance exceeds beyond the grace period. Different cards vary in APR rates for various types of balances such as balance transfers, purchases, cash advance, etc. APR can increase on certain situation such as when you use cash advance, once you are late in making payments or when your card applies the universal default clause in its agreement.
Grace Period: is the length of time cardholders are given in order to pay their balance in full before the finance charges start accumulating. If you have balance from the previous month, you will not a grace period for any new purchases you make. In order to determine the length of the grace period, you can simply call customer service and ask or you can check the terms and condition to find out.
Finance Charges: This is the amount of money all cardholders need to pay once they carry balances. The cost of the finance charge is determined by using the balance and the APR. All card companies have different ways of calculating finance charges. Some use adjusted, average or the previous month's balance, other use two billing cycles.
Rewards: One growing trend in the credit card industry are rewards card that provide incentives, bonuses or discounts each time the card is used. These rewards come in a variety of forms such as cash backs, vouchers, or through earning points.
Various Credit Card Fees: include annual, over the limit, late, finance charge, etc.
Below are few terms you should take into consideration before appy a new credit card.
Credit Line/Credit Limit
It known as the maximum amount of credit you can use on your card. All charges will include purchases, cash advances, balance transfers, finance charges and various fees. If you exceed the credit limit that the card allow while using the card, your card will decline, you are required to request a extra limit line and you have to pay a specified amount of fee.
The total amount of all purchases, finance charges and fees that are charged for that particular month. If you have high amount of balance, your available credit will decrease unless you gave a no-limit or a charge card. Note that high outstanding balance may increase your credit utilization and can lower down your credit score.
Annual Percentage Rate: This interest rate will apply once the balance exceeds beyond the grace period. Different cards vary in APR rates for various types of balances such as balance transfers, purchases, cash advance, etc. APR can increase on certain situation such as when you use cash advance, once you are late in making payments or when your card applies the universal default clause in its agreement.
Grace Period: is the length of time cardholders are given in order to pay their balance in full before the finance charges start accumulating. If you have balance from the previous month, you will not a grace period for any new purchases you make. In order to determine the length of the grace period, you can simply call customer service and ask or you can check the terms and condition to find out.
Finance Charges: This is the amount of money all cardholders need to pay once they carry balances. The cost of the finance charge is determined by using the balance and the APR. All card companies have different ways of calculating finance charges. Some use adjusted, average or the previous month's balance, other use two billing cycles.
Rewards: One growing trend in the credit card industry are rewards card that provide incentives, bonuses or discounts each time the card is used. These rewards come in a variety of forms such as cash backs, vouchers, or through earning points.
Various Credit Card Fees: include annual, over the limit, late, finance charge, etc.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=6c7dfc89-d596-4b1a-b820-d734f3ed733a)
