What's in the Credit Card Fine Print

{{credit}}With credit card offers flooding the Internet and filling your mailbox every day, how do you determine which offer will work the best for you? Understanding the terms of the credit agreement and the rates you'll be charged for purchases, late fees and overdrafts will go a long way toward making the best decision.

The language used in credit card agreements can often be confusing. If you don't educate yourself now, it could cost you and lead to a host of unexpected fees and charges. Here's a basic rundown of what you could see in your credit card agreement. The fine print of every credit card offer includes the following:

Annual Percentage Rate (APR): The interest rate you'll be charged for new purchases that is often based on your creditworthiness. The better your credit, the lower the interest rate you'll be charged. More about APR's...

Delinquency Rate: The increased interest rate that will be applied if you miss a minimum payment.

Balance Transfers Rates and Fees: A balance transfer is the process of moving an unpaid credit card debt from one issuer to another. This fee will show a minimum and a fixed percentage. You will pay the greater of the two.

Cash Advance: The rate that will be applied for any funds that you take with a cash advance.

Grace Period: Typically, you'll have 20-25 days to pay the balance in full to avoid any interest charges. If there is no grace period, finance charges will accrue the moment a purchase is made with the credit card.

Method of Computing the Balance for Purchases: Average Daily Balance, Adjusted Balance or Previous Balance methods are available methods of computation.

Annual Fee: A bank charge of $15 to $50 for use of a credit card levied each year billed directly to the customer's monthly statement.

Minimum Finance Charge: The minimum amount a cardholder must pay each month to keep the account from going into default.

Late Payment Fee: This fee will depend on how large a balance you are carrying or may be a fixed rate.

Periodic Rate: The interest rate described in relation to a specific amount of time. The monthly periodic rate, for example, is the cost of credit per month; the daily periodic rate is the cost of credit per day.

Overlimit fee: A one-time fee that is applied if you spend over your allowable credit limit.

Cash Advance and Convenience Check Fees: A cash advance is when you use a credit card to obtain cash. The fee charged for this service will be stated in terms of a flat per-transaction fee or a percentage of the amount of the cash advance. You will pay the greater of the two.

Foreign Currency: Normally, an additional fee is charged for converting currency when you make charges abroad. Typically between 1%-3%

Understanding these terms is vital in choosing the best credit card for your personal needs and interests. Not only will you have a much easier time determining the best deal, but you'll save money by avoiding unnecessary fees and charges. Before you apply for any credit card-- understand the fine print!{{/credit}}

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