Credit card issuers are required by law to disclose certain key information to consumers. These terms are important when you want to compare credit card plans between several credit card companies. Here are some of the more important credit card terms:
APR: (Annual percentage rate) for purchases: The annual percentage rate (as a percent, divide by 12 to get monthly rate) you will be charged if you carry a balance month-to-month. If your card has an introductory rate, you will see both the introductory rate and the rate that will apply after the introductory rate expires. A credit card may have several different APR’s, many introductory plans have 0 APR credit cards.
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It is interesting to note that what started off as a marketing gimmick has now become an almost permanent part of the credit card industry in America and today 0% APR credit cards can in fact play a significant role in helping a person reduce or get out of debt.
What Is A 0% APR Credit Card?
APR is the annual interest rate known in industry jargon as the Annual Percentage Rate. It is a reflection of the cost of credit. In the old days everybody paid a standard APR based on bank rates. It was usually about 18 per cent. The use of low APR came with the emergence of the monoline bank. These were banks that only issued credit cards and did not take any deposits or issue conventional loans. For their business model to work well large numbers were important for these breed of pioneering bankers and credit cards issuers so low APR teaser rates were successfully used to lure as many new card users as possible.
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Among the many innovations that emerged after World War II, credit use has become a major factor in our entire economic profile. As a result, your credit rating is the most important factor in determining your credit APR when you apply for any type of credit: credit cards, 0% APR transfer offers as well as mortgage and car loans.
What’s a credit score?
Credit reporting was created more than 100 years ago, when small retail merchants banded together to trade financial information about their customers. These merchant associations formed small credit bureaus, which later consolidated into larger organizations. By the 1960’s, consumers demanded the right to examine their credit reports and amend false or misleading credit information that had been withheld from them. In 1971, Congress enacted the Fair Credit Reporting Act, giving consumers the right to view and correct their records, as well as privacy protection as to who had access to these records.
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Although credit card issuers view student credit cards amongst the highest credit risk groups and accordingly charge higher interest rates, they provide an excellent opportunity for young people to start establishing a credit history that will ultimately get them a credit rating.
A good credit rating is not only important in helping a person secure credit but is also very useful when it comes to securing job, getting insurance and a host of other important things most people will need to get done in their lifetime.
Evidence that a good credit rating is of absolute importance is the popularity of any offer that purports to help repair a bad credit rating.
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Gas prices breaking your budget? Switch to a cash back credit card rewards plan and save 2% to 5% on all your purchases at your favorite gas station. For credit savvy consumers that can make a difference in real dollars and cents.
Branded gas company cards can cost you
By using a major credit card offered by Visa, Mastercard or American Express for your gasoline purchases you can save a lot of money over a branded gas company card, such as Shell, Amoco, Citgo or Exxon. Usually these gasoline branded cards have a much higher interest rate, usually about 21% or more.
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