If you've ever taken time taken time to read the fine print on your credit card statement or application, you may feel as though you're reading a foreign language. But, you shouldn't feel alone. Studies show that the majority of consumers simply can't understand the fine print and jargon used by the credit card industry. The problem is that this "jargon" usually pertains to interest rates and fees and being in the "know" can make a big difference in what you'll pay.
Though most everyone understands the basics of APR (the annual percentage rate of interest you'll pay), Annual Fee (the amount you'll be charged annually for the keeping the account open - this charge applies even if you never use your card. We've received so many emails asking about various terms that I wanted to dedicate an article to this topic. In my opinion, if you're going to have a credit card, you should have a solid understanding of all the terms and definitions. But, if I had to pick just three of the most important terms that every card holder MUST know and understand I would choose the following:
APR -- Short for Annual Percentage Rate, APR is the percentage you'll be charged on the purchases you make. APR is used to determine the "periodic rate" or the rate you'll pay for a single billing cycle. Dividing the APR by 12 will give you the "periodic rate."
Grace Period -- The grace period is the time between when your bill is prepared (not the date you receive it) and when you'll be charged interest on your purchases. Grace periods can vary but usually run around 25 days. You can save yourself expensive interest charges if you'll pay your card before the grace period ends.
Default Rate - I chose the default rate as one of the top 3 to know because I've heard horror stories of people transferring balances to a balance transfer card offering 0% interest only to lose that special rate because they were late on one payment. Though you might assume that "default" would mean something else, with many credit cards, a single late payment is defined as "default" and can result in a significantly higher interest for as much as 12 months or more in addition to forfeiting the rate that attracted you to the card in the first place.
ไม่มีความคิดเห็น:
แสดงความคิดเห็น