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Choosing The Right Credit Card

What should you know about APRs when choosing a credit card?

Cards have different APRs for purchases, cash advances and balance transfers. Tiered APRs have different interest rates for different levels of your balance. A penalty is applied if you are late with your payments. An introductory rate is good for a fixed amount of time after opening the account. A delayed APR will give you a different rate later.

A fixed interest rate means the Annual Percentage Rate does not change. The interest on a “fixed rate” card may change after time, but the card company has to tell you before your APR is increased.

Other cards are variable, meaning the Annual Percentage Rate changes at times. The rate is usually relevant to the Prime Interest Rate or the Treasury Bill Rate. If the that rate changes, your rate may change.

What you should know about fees?

Annual fee - just for having the card

Cash advance fee - if the card is used for cash advances

Balance-transfer fee - if you transfer the balance of another card

Late-payment fee - if your payment is late.

Over-the-limit fee - if you go over the limit.

Limit-increase fee - if you request increase to the credit limit.

Set-up fee - for opening a new account.

Return fee - if the check you use to pay your bill bounces.

Other fees - most companies charge a fee for telephone payments. Some charge report to credit bureaus. Other charge just to review your account or provide customer service.



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