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Best Credit Card Rates

The interest rate charged by a credit card is perhaps the most important concept to understand. One credit card may have associated with it several annual percentage rates (APRs), which are the rates that you pay on outstanding balances, balance transfers, or cash advances. Be sure that you understand the different APRs that you may pay on each amount, depending on how you plan to use your credit card. If you plan to use your credit card for just purchases and cash advances and are not interested in, say, mileage reward points, be sure the APRs associated with balances incurred for these activities are the lowest that you can find.

A good credit card will also offer a longer grace period, or the number of days that you have to pay your bill without incurring a finance charge. Most credit cards begin charging interest on cash advances and balance transfers immediately. If you plan to use your card for these activities, find the lowest APRs related to these balances. Also important is understanding the method that the credit card company uses to calculate interest charges, as whether the calculation is based on purchases made during the current billing cycle, or just on a previously unpaid balance, can make a significant difference.

Most credit cards charge various fixed fees in addition to the related APRs, such as annual fees, cash advance fees, balance transfer fees, over-credit-limit fees, late-payment fees, and fees to increase your credit limit. Understand the fees associated with a credit card. Obviously, the best credit cards are those with the lowest, and lowest number of, fees, and that offer the most rewards, like a gas credit card.

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  1. James said:
    on July 28th at 05:49 am

    “The interest rate charged by a credit card is perhaps the most important concept to understand.” I agree totally!

    The concept of compound interest is extremely important. If you carry over a balance you are not simply renting the money, but you are also renting the money you rent. Compound interest adds up. It really shocks me how few adults understand compound interest.

    To see how important interest rates are, there’s a simple rule known as the rule of 72. Basically you divide the interest rate into 72 to see how long it will take for the debt to grow. If you are being charged at 12% your debt will double every 6 years (72/12=6). A 4% increase to 16% means that it doubles every 4.5 years.

  2. gkr said:
    on August 15th at 09:07 am

    Compound interest does not really pose a significant problem for most of the credit cards. Because the compounding effect is dramatic only after APRs of higher value. For example say 20% and more. For most credit cards the APRs are generally 12%-18% and so the compund interest adds up loosely.

    If you use any credit card with an APR of suppose 33% or so, the debt on the balance amount increase significantly every month and eveyr year. It more than doubles in three years. The compounding is generally considered only for annual basis but if it is monthly and you have suppose 3% or more rate per month then it will add up so much to make you pay all of the salary.

  3. manfaza said:
    on December 11th at 09:36 pm

    Where did hte Chase cards go? DIdn’t you used to have Chase cards?

  4. manfaza said:
    on December 11th at 09:36 pm

    Compound interest does not really pose a significant problem for most of the credit cards. Because the compounding effect is dramatic only after APRs of higher value. For example say 20% and more. For most credit cards the APRs are generally 12%-18% and so the compund interest adds up loosely.

    If you use any credit card with an APR of suppose 33% or so, the debt on the balance amount increase significantly every month and eveyr year. It more than doubles in three years. The compounding is generally considered only for annual basis but if it is monthly and you have suppose 3% or more rate per month then it will add up so much to make you pay all of the salary.

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