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.