Credit card terms have become more complicated in recent years, and people who use credit cards should know what some of the most important terms mean and how they affect the fees that come with using the cards. Using a credit card can be expensive because of things like reward programmes, interest rates, and how the interest is calculated.
The first important term to know about credit cards is "Annual Fee." Not all credit card companies only charge interest. Some card companies make the person who has the card pay a fee every year just for having it. Even if the card isn't used, this charge will be put on it. This fee can be anywhere from $5 to $300, and it's usually only found on credit cards for people with a lot of money.
"Intro rate" or "intro rate" is another term that credit card companies often use. This term is used on credit cards that offer lower interest rates as an incentive for people to sign up for them. Most of the time, this rate is a lot lower than the normal interest rate that the credit card company charges. Usually, this rate is only good for a certain amount of time, after which the regular rate kicks in. People who are thinking about getting this kind of credit card should make sure they know what the real rate will be after the offer ends. People often get into trouble when they make a big purchase on their credit card and think they can pay it off quickly. When the interest rate jumps back up to the normal rate, they are often taken by surprise.
Many credit card companies want their customers to move the charges from their old cards to their new ones. Most of the time, this is offered or encouraged when the interest rate on the credit card is low at first. The person with the credit card should be very careful and read the fine print to make sure they won't be charged for this. Credit card companies often charge customers a "Balance Transfer Fee" when they combine the balances of all their other cards into one. Most of the time, this fee is more than what you would save by using the lower interest rate.
Credit cards are a great and easy way to manage money if you know how to use them right. If the card holder knows everything there is to know about the card, it will be used correctly and there will be less chance of financial trouble.
