You probably know that your credit card comes with an interest rate, a limit on how much you can spend and a minimum amount that you must pay each month. But if you’re not familiar with the nuts and bolts of each card component, take a little time to brush up. Knowing the types of activities that trigger a cash advance, for example, could save you a bundle in interest and fees, and smart use of the grace period lets you finance a purchase interest-free for several weeks.
Annual percentage rate (APR). If you don’t pay your statement balance in full by the payment due date, you’ll accrue interest on the unpaid amount (unless your card is charging a 0% APR for an introductory period). Recently, the average rate ran about 17%, according to the Federal Reserve. But many cards come with a range of possible APRs, and the customers with the strongest credit histories capture the lowest rates.
Most credit cards have a variable rate, typically composed of the prime rate plus a “margin” of a set number of percentage points. Each time the Federal Reserve changes the federal funds rate, the prime rate moves in tandem. In the second half of 2019, the Fed cut rates three times, each cut one-fourth of a percentage point. As a result, many cardholders saw their APRs fall by a total of 0.75 point. When a variable APR changes because of an increase or decrease in the underlying index, the new rate applies both to existing balances and new purchases.
Denne historien er fra February 2020-utgaven av Kiplinger's Personal Finance.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra February 2020-utgaven av Kiplinger's Personal Finance.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
My Top 30 Index: An Update
A year ago, I put together what I called \"my own reinvention\" of the Dow Jones industrial average, the popular 142-year-old large-cap index.
Balance Your Risk and Reward
These new ETFs let you cut stock market losses. But you'll sacrifice some gains.
IS A HYBRID CAR RIGHT FOR YOU?
Hybrids offer a fuel-saving option for drivers who have reservations about all-electric vehicles. But there are trade-offs.
HOW TO REACH YOUR INVESTING GOALS
Patience helped these four investors make their portfolios work for them.
WHERE TO INVEST NOW
Expect a lot of midyear churn, with a rally toward the end of 2024.
TIPS FOR FINANCING A HOME PROJECT
I recently had a call with a client who was looking to fund the construction of a swimming pool at his house.
MORE WOMEN THAN EVER ARE STARTING BUSINESSES
Retail and travel businesses, along with health, beauty and fitness, are popular with women entrepreneurs.
Finding Home Health Care
It’s important to hire a caregiver you trust.
UNDERSTANDING BOND FUND YIELDS
What's a 30-day SEC yield? A trailing 12-month yield? A yield to maturity? We explain what each measure says about an income fund.
ANSWERS TO YOUR QUESTIONS ON STUDENT LOANS
If you have federal student loans, you may benefit from new government policies. Here's what you need to know.