Compare Credit Card Programs
Comparing Current Credit Card Programs
by Dave Capra ÐThe Debtonator“
How will you use your credit card?
The first step in choosing a credit card is thinking about how you will use it.
If you expect to always pay your monthly bill in full--and other features such as frequent
flyer miles don’t interest you--your best choice may be a card that has no annual fee and
offers a longer grace period.
If you sometimes carry over a balance from month to month, you may be more
interested in a card that carries a lower interest rate (stated as an annual percentage rate,
If you expect to use your card to get cash advances, you’ll want to look for a card that
carries a lower APR and lower fees on cash advances. Some cards charge a higher APR
for cash advances than for purchases.
What are the APRs?
The annual percentage rate--APR--is the way of stating the interest rate you will pay if you
carry over a balance, take out a cash advance, or transfer a balance from another card. The
APR states the interest rate as a yearly rate.
A single credit card may have several APRs:
One APR for purchases, another for cash advances, and yet another for balance
transfers. The APRs for cash advances and balance transfers often are higher than the
APR for purchases (for example, 14% for purchases, 18% for cash advances, and 19%
for balance transfers).
Tiered APRs. Different rates are applied to different levels of the outstanding balance
(for example, 16% on balances of $1–$500 and 17% on balances above $500).
A penalty APR. The APR may increase if you are late in making payments. For example,
your card agreement may say, ÐIf your payment arrives more than ten days late two
times within a six-month period, the penalty rate will apply.“
An introductory APR. A different rate will apply after the introductory rate expires.