credit card terms apr limits more

conquering credit & credit cards

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how's it going?

what's in this lesson?

Didn’t realize you signed up for a vocab quiz when you signed up for your first credit card, huh? We’ll make it easy for you by defining the key terms like credit card APR, limits, and more.

credit card terms apr limits more

conquering credit & credit cards

Share

Share on facebook
Share on twitter
Share on linkedin
Share on email

what's in this lesson?

Didn’t realize you signed up for a vocab quiz when you signed up for your first credit card, huh? We’ll make it easy for you by defining the key terms like credit card APR, limits, and more.

credit card terms apr limits more

conquering credit & credit cards

Didn’t realize you signed up for a vocab quiz when you signed up for your first credit card, huh? We’ll make it easy for you by defining the key terms like credit card APR, limits, and more.

overview

When you get the hang of it, credit cards are pretty easy to manage. But, when you’re just getting started, you’ll have a bunch of crazy terms thrown at you that you won’t know. Let’s review them now so you can get the hang of it and know what to look out for.

 

  • Credit limit: The maximum amount you can spend each month on your card (although you want to try and avoid spending it all. More on this in the next lesson.)

 

  • Annual fee: This is the amount you pay each year to have access to a specific credit card. Fees vary significantly. Usually, the more rewards you can get, and the higher the credit limit, the higher the fees will be. There are also many cards that have a $0 annual fee, which might be a great starting point for you.

 

  • Billing cycle: This is crucial to pay attention to. If your payments are due on the 15th each month, that’s when you need to pay your bill by. If you miss your payment date, you’re subject to late fees and interest payments. These can pile up, so be careful!

 

  • Balance: Your balance, or statement balance, is how much you’ve spent and owe for each billing period.

 

  • Credit Card APR: APR stands for Annual Percentage Rate, and it’s the interest you will owe if you don’t pay your bill in full in a given month. Interest itself is defined as a payment you have to make to a lender as a percentage of what was borrowed. So, how does credit card interest, or APR, work? Credit card APR would be the extra percentage of what you borrowed that you have to pay back. For example, if your statement balance is $125 and you only pay $25 of it for the month, you’ll have to pay interest on the $100 you haven’t paid yet. APR calculates how much interest you’ll pay.

 

  • Minimum payment: This is the minimum amount you’ll have to pay each month without paying a late fee. It’s typically set at a specific amount (i.e. $25 every month) or it can be set based on a percentage of your balance, plus other factors. NOTE: it can be very tempting to pay just the minimum payment, but, as we’ll say many times in this course, do your best to pay off as much of your balance as possible each month. Everything outstanding between the minimum payment and your statement balance is subject to interest, and it can compound fast making it difficult to pay off your credit.

 

With credit cards, there’s always a lot to remember. And this is just part 1… check out part 2 for more key terms to make sure you don’t catch any surprises when you get your credit card.

 

Source(s): Bankrate, Credit Karma

How's it going?

resources

overview

When you get the hang of it, credit cards are pretty easy to manage. But, when you’re just getting started, you’ll have a bunch of crazy terms thrown at you that you won’t know. Let’s review them now so you can get the hang of it and know what to look out for.

 

  • Credit limit: The maximum amount you can spend each month on your card (although you want to try and avoid spending it all. More on this in the next lesson.)

 

  • Annual fee: This is the amount you pay each year to have access to a specific credit card. Fees vary significantly. Usually, the more rewards you can get, and the higher the credit limit, the higher the fees will be. There are also many cards that have a $0 annual fee, which might be a great starting point for you.

 

  • Billing cycle: This is crucial to pay attention to. If your payments are due on the 15th each month, that’s when you need to pay your bill by. If you miss your payment date, you’re subject to late fees and interest payments. These can pile up, so be careful!

 

  • Balance: Your balance, or statement balance, is how much you’ve spent and owe for each billing period.

 

  • Credit Card APR: APR stands for Annual Percentage Rate, and it’s the interest you will owe if you don’t pay your bill in full in a given month. Interest itself is defined as a payment you have to make to a lender as a percentage of what was borrowed. So, how does credit card interest, or APR, work? Credit card APR would be the extra percentage of what you borrowed that you have to pay back. For example, if your statement balance is $125 and you only pay $25 of it for the month, you’ll have to pay interest on the $100 you haven’t paid yet. APR calculates how much interest you’ll pay.

 

  • Minimum payment: This is the minimum amount you’ll have to pay each month without paying a late fee. It’s typically set at a specific amount (i.e. $25 every month) or it can be set based on a percentage of your balance, plus other factors. NOTE: it can be very tempting to pay just the minimum payment, but, as we’ll say many times in this course, do your best to pay off as much of your balance as possible each month. Everything outstanding between the minimum payment and your statement balance is subject to interest, and it can compound fast making it difficult to pay off your credit.

 

With credit cards, there’s always a lot to remember. And this is just part 1… check out part 2 for more key terms to make sure you don’t catch any surprises when you get your credit card.

 

Source(s): Bankrate, Credit Karma

Lessons in this course:

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