CREDIT CARDS

Credit card basics

Comparing credit cards is important to ensure you get the best deal. However, before comparing it is essential to understand what the different terms mean. A clear comprehension of the credit card keywords will help you to understand what the banks are talking about when it comes to credit cards.

Before making any decisions regarding credit cards, read these explanations first:

Annual Percentage Rate (APR) is the rate you end up paying if you make a late payment, you exceed your credit limit, or your credit score drops below a certain amount. Pay close attention to this because APR could triple depending on the terms of the credit offered.

Balance transfer is when you transfer a credit card debt (the balance) from one credit card to a balance transfer credit card. In other words: when you transfer money from your account to another one, your credit card company figures out how much interest to add to that balance (money).

Grace period is the amount of time you have to pay the full amount on your card balance after the end of the last billing cycle, before you’re charged interest on the balance. The longer the grace period lasts, the better.

Cashback credit cards are those cards that pay you back a small percentage of the spending carried out on the card. Despite the fact that it may sound attractive initially, think carefully before you take it: this option may not necessarily be suitable for everyone.

A cash advance is the term used when you use your credit card to withdraw cash from an ATM or cash point. This is the most expensive way to use a credit card because it holds the highest rates of interest.

The best deals depend on what your credit history is like and how you intend to use your credit card. Compare credit cards and choose the one that is right for you.

Tags: APR, balance transfer, cash advance, cashback credit cards, CREDIT CARDS, Grace period