What makes one credit card different from another is its features. Credit card features make a credit card attractive or unattractive. When you’re choosing a credit card, or using one of your existing credit cards, think about the credit features and how they will benefit or hurt you.
Interest Rate
Your credit card interest rate is a credit card features that directly influences how much you pay for borrowing money on your credit card. Credit card issuers typically give you a grace period to pay off your balance and avoid paying interest on your balance. The interest rate is typically expressed as the annual percentage rate or APR. You may have several interest rates on your credit card – an APR for purchases, one for balance transfers, and one for cash advances.
Grace Period
The grace period is the amount of time you have to pay your credit card balance in full and avoid interest charges. Credit card grace periods range from 20 to 30 days. A longer grace period is ideal because it gives you more time to pay off your balance. You may not always get a grace period. For example, if you started the billing cycle with a credit card balance, you might not have a grace period. Also, cash advances and balance transfers don’t usually have a grace period.
Fees
Credit cards come with a range of fees. Some of them can be avoided by using your credit card a certain way. For example, you can avoid being charged a late fee by paying your credit card balance on time. Some credit card fees are charged no matter what. This includes annual fees. Other credit card fees include over-limit fees charged when you go over your credit limit. A cash advance fee is charged when you make a ash advance on your credit card. Balance transfer fees are added when you transfer a balance to your credit card.
Credit Limit
The credit limit on a credit card is the maximum amount you can charge on your credit card without receiving a penalty. Credit card issuers must ask you whether you want to have over-the-limit transactions processed. If you don’t opt-in to over-the-limit fees, any transaction that would exceed your credit limit will be denied. But, if you opt-in, you’ll be charged an over-the-limit fee when a transaction puts you over your credit limit.