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  • Actual for You - Credit Card Basics – Understanding Five Main Credit Card Terms

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    annual percentage rate. The lower the APR, the less interest you're paying on the amount you owe.

    Okay - so why would anyone choose a credit card with a high interest rate?

    Most people don't CHOOSE to pay a

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    Credit cards are easy, right? You have a credit limit. As long as your balance isn't as high as your credit limit, you can pay for things with your credit card. When you pay for something with your credit card, you don't have to pay for it until later. You pay interest on your credit card balance and as long as you don't go over your credit limit, everything's fine.

    Well, not quite. Here are some of the most frequently asked questions about credit cards - and their answers, of course.

    What's interest?

    In a nutshell, interest is money that you pay a lender for the privilege of using HIS money to buy something.

    What's this about 'interest rates' and percentages?

    The interest rate is a way of determining how much you're paying for borrowing money on your credit card. It's stated as a percentage of the outstanding balance on your card, usually as an APR or annual percentage rate. The lower the APR, the less interest you're paying on the amount you owe.

    Okay - so why would anyone choose a credit card with a high interest rate?

    Most people don't CHOOSE to pay a

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    o pay for it until later. You pay interest on your credit card balance and as long as you don't go over your credit limit, everything's fine.

    Well, not quite. Here are some of the most frequently asked questions about credit cards - and their answers, of course.

    What's interest?

    In a nutshell, interest is money that you pay a lender for the privilege of using HIS money to buy something.

    What's this about 'interest rates' and percentages?

    The interest rate is a way of determining how much you're paying for borrowing money on your credit card. It's stated as a percentage of the outstanding balance on your card, usually as an APR or annual percentage rate. The lower the APR, the less interest you're paying on the amount you owe.

    Okay - so why would anyone choose a credit card with a high interest rate?

    Most people don't CHOOSE to pay a

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    dit cards - and their answers, of course.

    What's interest?

    In a nutshell, interest is money that you pay a lender for the privilege of using HIS money to buy something.

    What's this about 'interest rates' and percentages?

    The interest rate is a way of determining how much you're paying for borrowing money on your credit card. It's stated as a percentage of the outstanding balance on your card, usually as an APR or annual percentage rate. The lower the APR, the less interest you're paying on the amount you owe.

    Okay - so why would anyone choose a credit card with a high interest rate?

    Most people don't CHOOSE to pay a

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    es' and percentages?

    The interest rate is a way of determining how much you're paying for borrowing money on your credit card. It's stated as a percentage of the outstanding balance on your card, usually as an APR or annual percentage rate. The lower the APR, the less interest you're paying on the amount you owe.

    Okay - so why would anyone choose a credit card with a high interest rate?

    Most people don't CHOOSE to pay a

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    annual percentage rate. The lower the APR, the less interest you're paying on the amount you owe.

    Okay - so why would anyone choose a credit card with a high interest rate?

    Most people don't CHOOSE to pay a high interest rate. The bank decides what interest rate it will charge you, usually based on how much of a 'credit risk' you are. They determine that by looking at your history of paying bills. If you've got a history of paying bills on time, then you'll qualify for lower interest rates. If you haven't ever had any bills to pay, or if you've had trouble paying your bills, that will show in your credit history, too. Since it's a little riskier to lend you money, banks will charge a higher interest rate.

    One other reason that people might actually choose a credit car with a higher interest rate is for the rewards or privileges that come with that card. If the card includes special perks that you want, they may offset the higher interest rate and make it worthwhile.

    My card says that I pay interest on the 'outstanding balance'. What does that mean?

    Your outstanding balance

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