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Choosing a Credit Card Credit Card Statement

Credit cards come in all flavors. Your spending Each month you receive a credit card statement,
habits and credit rating often determine the types of showing your purchases, payments, and charges for
cards you use. the past month.

„ Low Interest - cards with a lower overall interest Payment due date: the date by which the credit card
rate - often available for people with better company must receive your payment
credit history Outstanding balance: the amount of money you still

„ Balance Transfer - cards offer an initial low need to repay
interest rate, available for a set time. You are Finance charge: the interest payment you owe on
encouraged to move your debt over from another the credit card balance
card where you paying more interest - this can Late fee: a penalty you are charged for not making
mean big savings if you pay your cards down your minimum payment by the payment due date
during the timeframe
Annual fee: the amount of money the credit card
„ Rewards Points - Some issuer charges you for having the credit card account
credit cards offer points for each year - some cards don’t have a fee
frequent flyer miles, hotels,
fuel, or other rewards. You Cash advance: money you are allowed to obtain in
earn points for every dollar the form of cash through the use of an ATM or bank -
you charge. If you make you pay a higher interest fee on this money
normal purchases with your New purchases/charges: a brief transaction history
card and pay off the balance every month, you showing purchases made with the credit card since
can make your cards work for you the last statement Exercise - Which Card Do You Choose?

„ Cash Back - You can earn 1% or so on your Previous payments: the amounts you paid on the Compare these three credit cards. What are the key benefits of each card? Which would you choose, and
purchases, so if you spend $500 a month, you last credit card bill why?
could earn $5 just for using the card. Some Card 1 Card 2 Card 3
cards offer 5% back on purchases in special How Interest is Calculated: Interest Rate: As low as 13.99% 15% Fixed 11.99-20.99% Variable
categories like groceries, prescriptions, etc. If Most credit cards calculate interest based on the
you pay off your purchases each month, it’s like average daily balance in your account for the Intro Rate: 0% APR for 6 months 0% APR for 6 months 0% APR for 6 months, 0% on balance
transfers for 18 months
receiving free money. month. Add up your balance on each day during the Annual Fee: None $39 None
„ Prepaid/Debit - You “buy” a credit card for a month, then divide it by the number of days in the Features: 1% cash back on every Includes emergency roadside Earn 5% cash back on gas and
set amount, say $100. Once you’ve spent all the month. purchase, 5% cash back on assistance, extended groceries, Earn .25% on every purchase
money on it, you may be able to reload it with Annual percentage rate (APR): the yearly interest groceries, travel, gas warranties for purchases, travel until you reach $3,000, then 1% after
more funds, or just throw it out. This is a good rate you pay on the credit card balance $25 back on your first purchase accident insurance that.
option if you have poor credit. There may be some Daily finance charge: the interest rate you pay each Benefits:
restrictions on its use. day on the outstanding balance (APR/ average daily
balance) My Choice: