adminAnnual Fee: A credit card’s annual fee is a yearly charge that is charged to the consumer to use the credit card and take advantage of its benefits. Credit card annual fees range from approximately $25–$500 per year depending on the card. Most consumers try to find a credit card with the benefits they want, but without the annual fee.
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Annual Percentage Rate (APR): The APR is the annual cost of borrowing money on your credit card. A credit card has several APR’s, including the APR on purchases, balance transfers, cash advances, and penalties/defaults. The APR on purchases is the interest rate charged after the grace period ends.
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Credit Limit: The credit limit on a credit card is the most you can spend on your credit card without incurring a penalty. If you have a short credit history and few credit accounts, your credit limit on a credit card will likely be low. If your credit history is longer and you have no blemishes on it, your credit limit could be quite high.
Credit card companies may automatically raise your credit limit as time passes, as long as you make your payments on time and use your credit responsibly. If you go over-limit on your credit card, you may have to pay an over-limit fee. The penalty APR may even be triggered on your card. You can opt-in and opt-out of over-limit charges and associated fees.
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Credit Score: Your credit score is an indicator of how likely it is that you will pay back the money that has been loaned to you. Everything about credit cards affects your credit score, including the number of cards you have (if any), the entirety of your payment history, and other factors associated with your debt history. If you use credit cards, you must use them carefully since your credit score impacts other areas of your life such as getting a mortgage or a car loan.
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Due Date: The due date on your credit card is the date when your minimum payment is due to the credit card company. It is usually due at 5 p.m. on the due date, but some credit card companies may have a deadline that is a little later in the evening. If you do not make your payment by the due date, you will incur a late fee, an increased APR, and you may be reported to the credit bureaus.
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Revolving Balance: A revolving balance on a credit card is the amount of your credit limit that you have used and not repaid. It is the portion of your credit limit on which you pay interest (APR) every day because you did not pay it off at the end of the previous month. If you pay your credit card balance in full every month, you will not have a revolving balance.
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Grace Period: The grace period on credit card purchases is the time period in which interest is not assessed after a purchase is made. Depending on the credit card, there may only be a grace period on purchases if you do not carry a balance on your credit card.
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