APR, minimum payments, compound interest, grace period, and fees.
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- What does APR stand for?
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Annual Percentage Rate- What is APR?
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The yearly cost of borrowing money on a credit card, shown as a percentage- What does a higher APR mean for you?
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You pay more interest on borrowed money- What is a minimum payment?
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The smallest amount you must pay by the due date to stay in good standing- What happens when you only pay the minimum payment?
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Most of the balance carries forward and you pay significant interest- What is a grace period?
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A period, usually 21 to 25 days, where you can pay your balance with no interest charges- When does the grace period apply?
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When you pay the full previous balance by the due date- What happens to your grace period if you carry a balance?
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It is lost and interest begins accruing immediately on new purchases- What is an annual fee?
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A yearly charge some credit cards impose just for having the card- What is a late fee?
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A charge imposed when you miss a payment deadline- What is a cash advance fee?
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A fee charged when you withdraw cash from your credit card at an ATM- Do cash advances have a higher APR than regular purchases?
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Usually yes, cash advances typically have higher interest rates- What is a balance transfer?
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Moving debt from one credit card to another, often to a card with a lower APR- What is an introductory APR?
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A temporarily low or zero percent rate offered to new cardholders- How long do introductory APRs typically last?
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Usually 3 to 21 months depending on the card
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