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This information can help you

• Understand the features of credit cards
• Compare credit card features and costs
• Know your rights when using your credit card
• File a complaint if you have a problem with your credit card

How will you use your credit card?

The first step in choosing a credit card is thinking about how you will use it.

• If you expect to always pay your monthly bill in full -- and other features such as frequent flyer miles don't interest you--your best choice may be a card that has no annual fee and offers a longer grace period.
• If you sometimes carry over a balance from month to month, you may be more interested in a card that carries a lower interest rate (stated as an annual percentage rate, or APR).
• If you expect to use your card to get cash advances, you'll want to look for a card that carries a lower APR and lower fees on cash advances. Some cards charge a higher APR for cash advances than for purchases.

What's the credit card APR?

The annual percentage rate--APR--is the way of stating the interest rate you will pay if you carry over a balance, take out a cash advance, or transfer a balance from another card.

The APR states the interest rate as a yearly rate.

How long is the Grace Period for the credit card?

The grace period is the number of days you have to pay your bill in full without triggering a finance charge.

For example, the credit card company may say that you have 25 days from the statement date, provided you paid your previous balance in full by the due date. The statement date is given on the bill.

The grace period usually applies only to new purchases.

Most credit cards do not give a grace period for cash advances and balance transfers. Instead, interest charges start right away.

If you carried over any part of your balance from the preceding month, you may not have a grace period for new purchases.

Instead, you may be charged interest as soon as you make a purchase (in addition to being charged interest on the earlier balance you have not paid off).

Look on the credit card application for information about the "method of computing the balance for purchases" to see if new purchases are included or excluded.

Information on methods of computing the balance is in the section "How is the finance charge calculated?"

These are just some of the considerations you will have to be aware of when choosing a credit card.

The bottom line is that you should always read the small print and think about what it is you are agreeing to and whether or not this is what you need.