When it comes to obtaining a new credit card, you might not have as much choices as people who already have good credit. But you should still do some comparison shopping to be sure you are getting the very best deal available to you. Charge card terms and interest levels vary – and some of those variations can make a huge difference to your wallet. Always look for the card with the very best interest rate and terms.

Here’s what you should search for in credit cards:

1. Avoid high interest rates. Credit card issuers disclose the interest rate in several ways, but you want to look at the APR (APR). This is the quantity of interest, transaction fees, along with other charges that you’ll pay each year, expressed as a percentage. It is the best indicator of the specific interest you will pay.

2. Avoid low introductory rates. Some cards have a low “introductory rate” (also known as a “teaser rate”). Following a few months, the interest will skyrocket. Fe-acc18 2020 Also, sometimes the advertised rate only applies to certain people, such as those earning a high income. The card company charges a higher rate to those that don’t qualify – that could mean an unpleasant surprise when your first bill arrives.

3. Understand interest calculations. Many banks today charge interest in line with the average daily balance. This is one way it works: Say you charge $1,500 on your charge card and pay $1,200 on the due date. Whenever your next bill arrives, a bank utilizing the average daily balance will charge interest on the $1,500 average daily balance from the previous month, not on the $300 you still owe.

4. Review the grace period. Here is the interest-free period of time between the purchase date and the bill due date. It is usually available only to those who usually do not carry a balance. In the event that you pay your bill in full each month, be sure you have a grace period. Otherwise, you’ll pay interest from the date of one’s purchase. If you carry a balance, a grace period is not important.

5. Avoid high annual fees. Some credit card companies charge you a set fee (besides interest along with other charges) for using their card. Some do not. In the event that you pay off your balance each month, you want a card lacking any annual fee. If you carry a balance, a card having an annual fee but a low interest rate may be better than a card with no annual fee but a high interest rate.