Read the fine print before choosing credit card


Published: Thursday, March 1, 2007 at 6:01 a.m.
Last Modified: Wednesday, February 28, 2007 at 3:37 p.m.

Chances are you've received "pre-approved" credit card offers in the mail. Examine the fine print carefully before you accept any offer for a credit or charge card. Look for:

  • The Annual Percentage Rate (APR): If the interest rate is variable, how is it determined and when can it change?

  • The periodic rate: This is the interest rate used to figure the finance charge on your balance each billing period.

  • The annual fee: While some cards have no annual fee, others expect you to pay an amount each year for being a cardholder.

  • The grace period: This is the number of days you have to pay your bill before finance charges start.

  • The finance charges: Most lenders calculate finance charges using an average daily account balance, which is the average of what you owed each day in the billing cycle. Look for offers that use an adjusted balance, which subtracts your monthly payment from your beginning balance. This method usually has the lowest finance charges. Stay away from offers that use the previous balance in calculating what you owe; this method has the highest finance charge. Also don't forget to check if there is a minimum finance charge.

  • Other fees: Ask about special fees when you get a cash advance, make a late payment, or go over your credit limit. Some companies charge a monthly fee regardless of whether you use your card.

    For more information, go to www.pueblo.gsa.gov.

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