Annual Percentage Rate

• A credit card's Annual Percentage Rate differs from company to company. An Annual Percentage Rate is the cost of credit expressed as a yearly interest rate. To fulfil this annual cost, throughout the year, your card issuer charges you smaller payments known as periodic rates. Periodic rate is a fraction of your APR applied to your balance each billing period. According to the Federal Trade Commission, a card issuer must disclose the "periodic rate". Finding the lowest APR and periodic rate can save you money over the year, especially if you keep high balances.
  
  

Fees

• Fees come in a variety of amounts and descriptions. Look carefully at your credit card contract before you sign it. A hidden fee gets its name because it is often overlooked. Some credit cards charge a participation or membership fee; some charge both. Other fees may fall under the title of activation, acceptance, annual or monthly maintenance fees. According to the Federal Trade Commission, these fees may appear monthly, periodically or as one-time charge. Your fees are located in the fee section of your contract. However, contract language can be difficult to understand, so you should call a card company before signing up to make sure you know all the fees you might be exposed to.
  
  

Grace Period

• A grace period, also called free period, is the allotted time you have to pay your balance in full to avoid finance charges. Not all credit cards offer grace periods, and not all consumers know the effects of a grace period. The Federal Trade Commission says "without a grace period, the card issuer may impose a finance charge from the date you use your card or from the date each transaction is posted to your account." Always ask your credit card company about its grace period, if any, and avoid unnecessary cost.
  
  

Benefits and Rewards

• Credit card companies offer various incentives to certain customers and often extend special benefits to new customers. For example, a card company might offer an introductory APR of zero percent to attract new customers or offer better rates on credit transfers. Some companies offer reward points that you redeem for cash or prizes. Some card issuers may wave maintenance fees for customers who keep their balances below a certain amount. If you regularly carry over balances from month to month, interest rates are more important than rewards, and rewards might also encourage over spending in order to gain "points." However, if you regularly pay off your balance each month, rewards can be an important consideration.