Credit Card question?
Can somebody explain what these things mean in English? I’ve been doing research and comparing different cards, but I don’t think I really know what the truth is behind all the fancy advertisement.
I’ve been searching on http : // www . creditcardguide . com / , and it has everything together for easy comparison.
What is the best APR?
How will the different APRs effect me?
What is this Cashback thing?
I think my favorite so far is the Citi CashReturns card. Is this a good one?
Thanks guys, I know this whole question is a jumbled mess but I appreciate your help! =]
***Okay, just as a little background information: I’m 18, this is my first credit card and I need it to build credit.****
Mkay thanks! =]
APR=annual percentage rate (the interest they charge %rate/365*number of days in billing cycle)
It effects you because anything not paid in full by the due date will be charged interest the higher the apr the more you pay.
cash back gives you a small % of all purchases back in a specified time frame.
Good luck on the credit!
APR is a way to compare the real interest rates. The lower the APR, the better. Of course, if you are wise and pay your balance in full each month before the due date, there won’t be any interest charged so you won’t care.
I have a cash back card and it really does credit me 1% of my purchases (3% on gas) each month, which is nice but not necessary. The key thing is you don’t want to pay an annual fee.
The best way to build credit is to have 1 or 2 cards and pay them in full each and every month.
I like cash rewards card that give you 1% cash back.
They usually carry the highest APR - but who cares, you will pay it in full each month. You will never know what paying apr is if you do things right.
APR=annual percentage rate which is the interest rate that they will charge you on whatever your balance is each month….you want to try to find the lowest APR because the higher the APR the more interest you will be charged. Annnnd if you pay off your balance right away and don’t let it carry over to the next month then they won’t charge you any interest at all.
Some credit cards offer cash back at a certain percentage based on how much you charge on the card….it sounds like a cool idea but if you’re not going to be charging a lot then you won’t be getting very much cash back anyway.
You’re doing a good job researching which card you want. My only words of advice on credit cards is to be very very careful not to use it too much and charge more than you can afford to pay back–it’s way too easy to do and it will hurt you for a very long time.
Good luck to you and I hope you find what you are looking for!
Multiple APRs
A single credit card may have several types of APRs including APR for purchases, cash advances and balance transfers. APRs for cash advances and balance transfers tend to be higher than the APR for normal purchases. Many folks forget about this detail and as a result get a slight shock after receiving their first statement. Don’t let this happen to you. It is best to reserve the use of cash advances to emergencies only.
Tiered APRs
Different APR rates are applied to different levels of the outstanding balance (for example, 12% on balances of $1–$999 and 18% on balances above $999). To combat this extreme, one simply has to refrain from carrying a balance over the cut off point.
Penalty APR
APR can increase if late in making payment in accordance with your card agreement. These tend to be rather high, so naturally it is best to try and avoid them altogether.
Introductory APR
The normal rate will apply after the introductory rate lapses. Usually you have to dig a bit perhaps to find out what this “real” rate is. Read the terms and conditions carefully of the individual credit card offer for example, when applying.
Delayed APR
The rate will change at some time in the future in accordance with the card agreement. An example of this would be: “0% APR for 6 months!”. Be certain to read the card agreement beforehand so you know what the actual rate is you will have to pay after the introductory period is over on a credit card for example.
Fixed or Variable APR?
Fixed rate means that the APR does not change without due notice. Variable rate cards usually have their interest changed due to the fact they are tied to an investment platform like treasury notes or the like. They do tend to change more often and without notice as this is also reflected in the agreement. In short, just because an offer for credit is advertised as fixed does not mean that it is. Comb the terms and and conditions of any agreement to be certain you are in for no surprises.
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Dave Taylor
I was desperate for Gas Money and found a Free $250 Gas Card online
for doing an easy 1 minute survey:
Also….do not apply for a card w/ any kind of annual fee….those are indicative of “bottom feeder” credit cards (excluding AMEX)….stay away from gas cards/dept store card/jewelry/etc)
The type of credit you obtain can also hurt your score down the road…
Remember…never charge more than you can fully pay off…as your credit lines increase…never carry on going balances exceeding 30%…
If your combined credit lines equal $3000….never have more than $900 racked up ever…but obviously never carry a balance…
good luck.