Credit Card Basics
What you need to know before
signing up…
History of Credit Cards
Credits Cards started as department
store credit cards –
 Their use grew because
customers spent 112% more using
a credit card than if cash was
used! (that still holds true today)
Credit Cards
Terms and Conditions
Annual Percentage Rate (APR): interest
rate you pay on the credit card as a yearly
Variable Rate: interest rate you pay that
changes according to a set formula:
such as Prime Rate +3.
Fixed Interest Rate: interest rate you pay
that doesn’t change, without a 15 day notice
from the credit card company.
Credit Cards
more Terms and Conditions
Grace Period: period in which finance
charges do not accrue if you do not carry a
Payment Due Date: last day that payment is
due without penalty.
Minimum Monthly Payment: lowest
amount that you can pay toward your credit
card balance, each month.
Credit Cards
and more Terms and Conditions
Purchase APR Rate: interest rate that you
pay on purchases made using your credit
card, if you don’t pay the balance in full.
Cash advance APR: interest rate charged
on getting cash from your credit card. Interest
is started immediately on the cash advance.
Balance Transfer: ability to transfer the
balance from one credit card to another.
Credit Card Typical Offers
Low Introductory Rates: a low or 0% rate
on your credit card balance for a limited time.
No Annual Fee: Credit cards that you don’t
have to pay a fee to use; caution, can require
a minimum number of purchases or pay an
“inactivity fee”.
Rewards Cards: purchases you make earn
you “rewards” for using the credit card
[such as, airline travel, store credit certificates, even
cash back.]
Credit Card Summary
Know what you are
signing up for as
credit card
companies are in
the business of
making money by
lending you money.

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