Credit Card Terms

A credit card is a form of borrowing that often involves charges. Credit terms and conditions affect your overall cost. So it’s wise to compare terms and fees before you agree to open a credit or charge card account.

The following are some important terms to consider that generally must be disclosed in credit card applications or in solicitations that require no application. You also may want to ask about these terms when you’re shopping for a card.

Annual Percentage Rate. The APR is a measure of the cost of credit, expressed as a yearly rate. It also must be disclosed before you become obligated on the account and on your account statements.

The card issuer also must disclose the “periodic rate” – the rate applied to your outstanding balance to figure the finance charge for each billing period.

Some credit card plans allow the issuer to change your APR when interest rates or other economic indicators – called indexes – change. Because the rate change is linked to the index’s performance, these plans are called “variable rate” programs. Rate changes raise or lower the finance charge on your account. If you’re considering a variable rate card, the issuer must also provide various information that discloses to you:

that the rate may change; and
how the rate is determined – which index is used and what additional amount, the “margin,” is added to determine your new rate.

At the latest, you also must receive information, before you become obligated on the account, about any limitations on how much and how often your rate may change.

Free Period. Also called a “grace period,” a free period lets you avoid finance charges by paying your balance in full before the due date. Knowing whether a card gives you a free period is especially important if you plan to pay your account in full each month. Without a free 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. If your card includes a free period, the issuer must mail your bill at least 14 days before the due date so you’ll have enough time to pay.

Annual Fees. Most issuers charge annual membership or participation fees. They often range from $25 to $50, sometimes up to $100; “gold” or “platinum” cards often charge up to $75 and sometimes up to several hundred dollars.

Transaction Fees and Other Charges. A card may include other costs. Some issuers charge a fee if you use the card to get a cash advance, make a late payment, or exceed your credit limit. Some charge a monthly fee whether or not you use the card.

Balance Computation Method for the Finance Charge. If you don’t have a free period, or if you expect to pay for purchases over time, it’s important to know what method the issuer uses to calculate your finance charge. This can make a big difference in how much of a finance charge you’ll pay – even if the APR and your buying patterns remain relatively constant.

Examples of balance computation methods include the following.

Average Daily Balance. This is the most common calculation method. It credits your account from the day payment is received by the issuer. To figure the balance due, the issuer totals the beginning balance for each day in the billing period and subtracts any credits made to your account that day. While new purchases may or may not be added to the balance, depending on your plan, cash advances typically are included. The resulting daily balances are added for the billing cycle. The total is then divided by the number of days in the billing period to get the “average daily balance.”

Adjusted Balance. This is usually the most advantageous method for card holders. Your balance is determined by subtracting payments or credits received during the current billing period from the balance at the end of the previous billing period. Purchases made during the billing period aren’t included.

This method gives you until the end of the billing cycle to pay a portion of your balance to avoid the interest charges on that amount. Some creditors exclude prior, unpaid finance charges from the previous balance.
Previous Balance. This is the amount you owed at the end of the previous billing period. Payments, credits and new purchases during the current billing period are not included. Some creditors also exclude unpaid finance charges.

Two-cycle Balances. Issuers sometimes use various methods to calculate your balance that make use of your last two month’s account activity. Read your agreement carefully to find out if your issuer uses this approach and, if so, what specific two-cycle method is used.

If you don’t understand how your balance is calculated, ask your card issuer. An explanation must also appear on your billing statements.

Other Costs and Features

Credit terms vary among issuers. When shopping for a card, think about how you plan to use it. If you expect to pay your bills in full each month, the annual fee and other charges may be more important than the periodic rate and the APR, if there is a grace period for purchases. However, if you use the cash advance feature, many cards do not permit a grace period for the amounts due – even if they have a grace period for purchases. So, it may still be wise to consider the APR and balance computation method. Also, if you plan to pay for purchases over time, the APR and the balance computation method are definitely major considerations.

You’ll probably also want to consider if the credit limit is high enough, how widely the card is accepted, and the plan’s services and features. For example, you may be interested in “affinity cards” – all-purpose credit cards sponsored by professional organizations, college alumni associations and some members of the travel industry. An affinity card issuer often donates a portion of the annual fees or charges to the sponsoring organization, or qualifies you for free travel or other bonuses.

Special Delinquency Rates. Some cards with low rates for on-time payments apply a very high APR if you are late a certain number of times in any specified time period. These rates sometimes exceed 20 percent. Information about delinquency rates should be disclosed to you in credit card applications or in solicitations that do not require an application.

Shopping Tips

Keep these tips in mind when looking for a credit or charge card.
Shop around for the plan that best fits your needs.
Make sure you understand a plan’s terms before you accept the card.
Hold on to receipts to reconcile charges when your bill arrives.
Protect your cards and account numbers to prevent unauthorized use. Draw a line through blank spaces on charge slips so the amount can’t be changed. Tear up carbons.
Keep a record – in a safe place separate from your cards – of your account numbers, expiration dates and the phone numbers of each issuer to report a loss quickly.
Carry only the cards you think you’ll use.

Are you tired of fighting high credit card fees? Why not lower your interest payments by transferring your balance to another card. Balance transfers are one the smartest and easiest ways to reduce credit card costs. Just be sure you understand the terms and conditions of the new card, so you can maximize your savings.
Before you run out and switch credit cards, consider whether you want to keep your current card. If you do, simply ask for a lower interest rate. Tell your credit card company you’ve found another card with a much lower rate and you’ll have to transfer your balance if they can’t cut you a deal. However, be prepared to do so if they refuse your request.
Why Use a Balance Transfer?
Balance transfers can provide card holders with a number of advantages. Transferring balances to a lower rate credit card can drastically reduce your interest rate and fees. Credit card companies charge varying interest rates on balance transfers and purchases. The most common rate is 0 percent for six through 12 months.
For example, the Chase Ultimate Rewards MasterCard and Citi Platinum Select MasterCard charge no interest for 12 months on balance transfers and purchases. The Discover Platinum Card and the Hess Visa from Chase drop the introductory rate after eight and six months, respectively.
Some cards link the introductory annual percentage rate (APR) to billing cycles. The GM Card and Fifth Third Bank Cash Rewards MasterCard, respectively, charge 0 percent APR for the first six and four cycles.
Transferring balances can also give you access to more perks. For example, you may be able to get a new card that has no annual fee, a longer payment grace period or cash back on purchases and other rewards. Some cards also offer car rental insurance, identity theft protection programs and money saving discounts.
How to Transfer Balances
Credit card companies commonly use low interest rate balance transfers to attract new customers. There are three main ways to transfer the balance on a card. One way is by simply filling out the paperwork provided by your new card issuer. Or you can contact the credit card company that you want to transfer a balance to and make arrangements for a balance transfer.
You can also shift balances by writing balance transfer or convenience checks. These simple checks look and act like regular checks. You simply write a check for the amount of the balance transfer and send it to the company you want to transfer a balance from. Some checks have an expiration deadline, so make sure you use them within the appropriate time frame. If you don’t, you’ll be charge the regular interest rate set for your card.
Regardless of which transfer method you use, you can only transfer as much as your credit limit on the card you are transferring allows.
Transaction Cost and Other Fees
Banks generally treat balance transfers like cash advances and have similar transaction fees. There’s no fee for balances transferred in response to special offers. But for Citi Platinum Select and many other companies, the transaction fee for balance transfers is 3 percent of the amount of each balance transfer, with a $5 minimum and $50 maximum. Keep in mind that a small amount of funds may not be worth transferring because the transaction fee may outweigh your potential savings.
In addition to standard transaction costs, banks also charge special fees that can take you by surprise. Some of the most common special fees include:

Late fees – Some banks wait a few days before assessing a late fee, but many impose it the day after the payment was due. Companies either charge a flat fee, such as $10 or $15, or a percentage, such as 5 percent, of the minimum payment due. To avoid late fees, mail off your payment so it arrives in plenty of time before it’s due. If you pay your bill at the bank’s branch or ATM, find out how long it will take to process your payment. Sometimes payments made at a branch or ATM aren’t credited for a few days.
Over-credit-limit fees – Most cards assess a fee if you charge more than your credit limit. These fees are charged each time you go over your limit, so you could be hit with several of them during the same billing period. Banks typically charge $10 or $15 for this fee or up to 5 percent of the amount you’re over your limit. These fees are in addition to interest charges.
Lost card replacement fees? If your card has been lost or stolen more than once and you need a new one, some companies will charge you for a replacement. These fees are range from $5 to $10.

Making Payments
After you transfer balances, be sure to make all your payments in full and on time or you’ll automatically be hit with higher fees. Generally, there’s no grace period for repaying balance transfers, so interest will accumulate immediately. (No interest will actually accumulate if you have an introductory 0 percent APR.)
When making payments, it’s important to understand that the payments you make will first be applied to balances with lower or promotional balances and then allocated toward higher APRs. That means you’ll be paying down 0 percent balance transfers before you even touch the balance on regular purchases which can be charged at a rate of 9 to 18 percent. As a word of advice, consider using a different card for your regular purchases and pay off the balance each month. Keep your balance transfers restricted to a separate card.
After the Promotional Honeymoon Ends
You need to keep a close eye on the promotional period. As soon as it expires, normal interest rates will apply. The standard variable APR for Citi Platinum purchases (8.99 percent) will be applied to all remaining purchase and balance transfer amounts. Likewise, the standard variable APR for cash advances (19.99 percent) will be applied to all remaining cash advance amounts. If you default on Citi Platinum’s card agreement, the company can immediately increase the APR on all balances including any promotional balances to a variable default rate of 28.99 percent.
Your post-introductory APR will depend on your credit history. If this interest rate is significantly higher than the rate on your old card and you have a remaining balance, you’ll wind up losing money. Of course, you could always transfer your balance to a new card with a lower promotional rate. Just be careful not to entangle yourself in a vicious cycle that could backfire later
To Compare Credit Card
http://www.bestcreditrates.net

JPMorgan Chase and Co. is a leading banking as well as financial provider. Chase offers its customers both small and large business banking, investments and insurance as well as personal banking facilities.

Chase Manhattan has come up with the Chase Platinum Credit Card that offers its privileged cardholders significant rewards programs and maximum value.

Benefits Of The Card

If you are on the lookout for a credit card that comes with a low interest rate and a good rewards program, then the Platinum Visa Card is suitable for you.

The card has a 0% introductory annual percentage rate (APR). The introductory offer on APR usually continues for 12 months but ultimately it depends on your balance transfers, purchases and credit background. With the termination of the introductory period, a regular APR of 14.24% sets in. The card comes without any annual fee and provides a flexible rewards program.

The card gives you the opportunity earn one point for spending every dollar on purchases. Your points can add up to 60000 each year. The points are redeemable for a time-period of five years from the date of accrual. You have the liberty of converting your points into select merchandise or can ask for cash back. You also have the scope of trading in your points for gift cards or for meeting travel expenses.

Other Benefits

The Chase Platinum Credit Card offers a free of interest grace period that lets you pay your full bill per month. The card further allows certain platinum benefits, like free online access in order to let you make monthly payments, view your account, available credit and outstanding balance.

The cardholder must keep in mind that the credit card makes use of a costly method of computing balances and is thus unsuitable for the cardholder if he/she plans to carry a balance. Even if you desire to carry an occasional large revolving balance, the card will not be appropriate for you, as the card uses the Two Cycles Average Daily Balance method for determining the finance charges. This costs more in comparison to the Average Daily Balance method that is used by most of the other credit card issuers.

The free travel services of the credit card include $500000 Worldwide Travel Accident Insurance and auto rental insurance. The facilities of the Chase Platinum Credit Card are convenient for dependable consumers seeking a decent credit card with an excellent rewards program.

Added Advantages

The Chase Platinum Credit Card like most of the other credit cards, offer its customers different Internet account related services, no liability for unauthorized transactions, and extended warranty for purchases.

The card also provides emergency card and cash replacement, lost and stolen card reporting, a financial statement at the end of the year and other facilities to the cardholder. However, it is essential to go through the restrictions, exclusions and limitations that are applicable.

Effective Ways Of Getting the Best Rates for Your Credit Cards

How many times a day do you receive offers through email or phone for free credit cards with money back schemes, low introductory rates and other perks of credit cards? All banks and financial institutions vie for maximum customers by pouring umpteen perks to tempt you, the customer, in one way or the other.

Remember that a credit card is just a form of borrowing money that has to be paid later. However, it is better to choose a credit card with good rates to avoid ending up paying too much interest to the banks. Make it a point to compare credit card terms and fees before opening a credit or charge card account. Once you find the credit card that has an interest rate that best fits your needs and budget, you can then open an account with that bank.

The annual percentage rate is the measure of the cost of credit the bank offers and is expressed as a yearly rate. Make sure you are aware of this rate before accepting a credit card as some credit card plans have interest rates that change when other economic indicators change. This plan is called a variable rate program. In such a case, when you first get the credit card, you may be offered 5% interest, but in case of index changes, the interest rate may go up to 8%. This means you will later have to pay more interest with the increased interest rate! So confirm if the credit card offers a variable rate program or ‘fixed rate’ program where there is no change in the annual percentage rate, even when economic indicators change.

It is beneficial for you if the credit card you have has a ‘grace period’. This is the period where you can avoid finance charges by paying your balance before due date. This is because with a free period, you will be sent your bill at least 14 days before the due date, thus giving you enough time to pay. Check if the credit card charges annual membership or participation fees or any other costs like transaction fees. It is better to choose the credit card company offering the least ‘extra costs’! This is because the more extra costs there are, the more money you have to pay the company!

When applying for a credit card, it is better to first consider if the credit limit is up to your requirements. Then only is it beneficial for you to apply for the credit card. To get the best rate for your credit card, make sure you understand all terms and condition of the card before accepting it. This is to avoid any future misunderstandings and misconceptions with the credit card company.

Of course, the main point that is taken into consideration to get the best rate for your credit card is your credit score. The better the credit score you have, the better will be the rates the credit card company offers you! This is the reason it is always advisable to have, and maintain a good credit score!

Suggestions of cards that are created and maintained for people with an imperfect credit history. Numerous cards that allow those with no credit to apply and successfully be granted a credit card in order to begin building up and improving their credit card history.

The first card offered is the Orchard Bank Gold MasterCard. This card comes with all the privileges and benefits of a normal gold card and reports to all 3 credit bureaus monthly. This monthly reporting can help improve your credit score. The annual fee is $79 and the late fee is $35. The card offers a 25 days grace period and an overlimit fee of $30. Thee APR is on the high end at 14.9%.

The next card on offer is the First Premier Bank Gold MasterCard. This card offers instant notification of approval and 24 hour access to their premiere quality customer service. There is a low APR on purchases, a 25 day grace period, a $25 late fee and a $25 overlimit fee. As with the Orchard Bank Gold MasterCard, a consumer needn’t worry about his or her credit history in order to be considered for this card.

Another card suggested by Credit.com is the Centennial MasterCard. This card offers a low APR on purchased and quality customer service. It also has a 25 day grace period, a $25 late fee and a $25 overlimit fee. The site also recommends the Total Visa Card. This card offers an instant online decision as to acceptance and monthly reporting to all the major credit bureaus. You can access your account online for free 24 hours a day, 7 days a week. The annual fee is $48, the grace period is 25 days, the late fee is $29 dollars and the overlimit fee is $25.

The last two cards are the First Premier Bank MasterCard and the New Millennium Bank Secured Platinum Visa or MasterCard. The First Premier Bank MasterCard reports to all the major bureaus, has a low APR on purchases, a 25 day grace period, $25 late fee and $25 overlimit’ fee. The New Millennium Bank Secured Platinum Visa or MasterCard does not require a credit check, will approve you regardless of your credit history and has credit limits up to $10,000. The annual fee is $59, the late fee $20 and the overlimit fee $25. However, the APR is an astounding 19.50% so if any of the other cards are available to you, it may behoove you to seek them out before you apply for The New Millennium Bank Secured Platinum Visa or MasterCard.