It’s a fact that most people are not getting the best rates on their revolving credit accounts, especially consumer credit cards. Often this is because a consumer has received a tempting “pre-approved” offer for credit and all too often the recipient just accepts the card to avoid the hassle or chance of rejection if they applied for a card directly. Yet all too often, we find these offers connected with cards that have exorbitant interest rates of 18% to 24% (or more)!

Even though credit cards all basically look the same and work similarly when it comes to making a purchase, people tend to assume that they are basically all the same. Well this is one case where “if it walks and talks like a duck, it must be a duck” just doesn’t ring true.

Credit Card Terminology
Credit terms and conditions affect the overall cost of using your creditability. It makes a lot of good sense to compare terms and fees before you agree to open a credit or charge card account. Here are some of the more important terms that are disclosed in most credit applications pre-approved or otherwise.
When you’re shopping for a card, it may be helpful to ask about these terms in particular.

Annual Percentage Rate. The APR is what it costs you for the credit, measured at an annual rate. This figure must be disclosed before you agree to accept any credit. The credit issuer must also disclose the “periodic rate” – the rate applied to your outstanding balance for the finance charge each billing period.

On many cards, this rate is fixed, while there are also variable rate cards. This means the rate can vary, going up and down with changes in the prime and other lending rate variables. If you apply for a variable rate card, you must also be informed of how that rate is determined, how you’re informed of changes, how often the rate can change, and what the maximum allowable interest rate can be on the card regardless of the economy.

Free or Grace Period. This is the period where you can avoid finance charges by paying your balance in full before the due date. Not all cards provide a grace period, which means they begin charging interest the moment you make the purchase and no matter how quickly you pay, you’ll pay some finance charges. For cards that offer a grace period the bill For cards that offer a grace period, the bill must be sent to you at least 14 days before the due date to give the card holder enough time to pay. The grace period should be 28 to 30 days.

Annual Fees. Most card issuers charge an annual membership or participation fee. This often ranges from a low of about $25 to over $100 for some “gold” and “platinum” cards. However, many cards charge no annual fee at all, so be careful when choosing. Also, be aware of cards that charge no “annual” fee, but charge exorbitant monthly “membership” fees or extremely high interest rates to make up for it.

Transaction Fees and Additional Charges. Cards often include other costs. Some charge for using the card to get a “cash advance”, for making a late payment, or exceeding your credit limit. widely among issuers. When shopping for your credit, consider how you’re going to use it. If you expect to pay your balance off in full each month, the annual fee, grace period and other charges may be more important than the interest rate and finance charges. However, if you are going to maintain a balance, then you need to consider the interest rates and monthly finance charges in addition to other charges and fees.