Six Key Terms to Watch for when you Apply for a Credit Card

These days, it's more important than ever before to understand just what is all involved before you send in a credit card application. So if you're on the lookout for a new credit card, read carefully through the terms and conditions attached to it. They'll give you a good idea of what to expect after you apply. Here are some of the terms to look for when hunting for a new card.

Annual Percentage Rate

This can vary greatly from card to card, and may even be adjusted according to your credit score. The annual percentage rate, usually referred to as the APR, is the interest rate that will be applied to the balance on your card. It is always expressed as a yearly rate. The higher the APR, the more you will pay in interest when carrying a balance. Look for a low APR if you know that you'll usually have a balance.

Grace Period

The grace period refers to how many days you have to pay your bill without having to pay any interest. When you make a purchase, if you pay the amount back during the grace period, you will not be charged any interest. The time of the grace period can vary from card to card, but is usually at least 21 days.

Annual Fee

This is an important one to look for, as some cards charge an annual fee and others do not. Check to see what the card you're interested in does. If it has an annual fee, check to see if the benefits it offers make the annual charge worthwhile. If not, look for a card without an annual fee.

Over-the-Limit Fee

This is the amount that you will be charged if you go over the limit on your card. Find out how much the fee will be. Also check to see what the limit on the card is. This way, you can work hard to stay under it and avoid over-the-limit fees.

Cash Advance Fee

If you take out cash with the credit card, you will have to face the fees that go with it. The cash advance fee is either a set amount or is based on the percentage of the amount that you receive. Cash advance fees and interest rates tend to be on the high side, so find out what you will be charged before using your card for dollars.

Minimum Payment

The minimum payment refers to how much you must pay each month in order to avoid defaulting on the card. This will show up on your monthly statement, so watch for it. If you can, always pay more than the minimum amount listed.

Balance Transfer Terms

Some credit cards allow you to bring a balance over from a previous card. If this is the case, there is often a fee involved. Check to see what it is before you transfer a balance. If it works for your situation, you'll want to go ahead and apply for the card. If not, keep looking for an offer that better fits your financial needs.

Click Here To Apply For A Credit Card. Stephanie Andrews is a contributing editor of the website www.CreditCardCity.com, a credit card directory where you can apply for a new credit card with secure online applications. Visit now to compare all of the best online credit card offers.

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