Terms to know about for understanding credit cards

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Cardholder Benefits » Terms to know about for understanding credit cards

Terms to know about for understanding credit cards

The content is accurate at the time of publication and is subject to change.

Understanding credit cards will help customers see through the strategies used by credit card companies to get the better of them. Credit card companies are looking for profits all the time, which is why you must be sceptical about credit card rewards. Understanding credit cards means looking at the whole dynamics of how the cards work including the parameters and fine print that come with the credit cards.

Annual fee

A lot of reward cards with attractive offers eat into the customers` savings through an annual fee which could be as high as 100 dollars or even more. The annual fee is higher for the cards which are more in demand like the frequent flyer and frequent shopper reward cards. This is all the more reason to check the annual fee on the card and ensure that it has been waived at least for the first year.

Application Fees

With the new credit card reforms, credit card companies have lost a lot of revenue. Therefore, they are trying to make up for it through various types of fees. Application fee, activation fee, interchange fee for foreign exchange expenses and various other types of a fee levied by the card issuer shouldn`t be excessive. If they are, it is best to pass instead of making yourself vulnerable to the fees which could be hidden.

Penalties

Two types of fees that are levied as penalties are the late fee and the overdraft fees. When accepting a credit card offer, ensure that they are not way too high. Penalty could also include raising your APR excessively, although, thanks to the credit card reforms, these rates must be kept down if you make your payments consistently for 6 months. Nevertheless, you will have to keep an eye out for all these fees. The grace period available to you after the bill has been generated and the general flexibility you get will give you a good idea about how trustworthy a card issuer is.

Rewards

Credit card rewards are used by card issuers to entice the customer. However, understanding credit cards involves understanding the usefulness of these rewards. Rewards with a lot of caps, limitations and other conditions before you could avail them are practically not worth pursuing. On the other hand, low interest rate and cash back offers are something that is useful and hence better than discounts, bonus, loyalty, and reward points.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related Research:

Top 5 Secured Credit Cards: November 2020 – Experts’ Choice

Top 5 Secured Credit Cards: November 2020 – Experts’ Choice

Posted: June 22, 2020

The COVID-19 pandemic has made significant changes not only in people’s lives and their financial standing but also in the entire financial sector of the U.S. We have collected the best secured card offers from our partners so that you can… Continue reading

Top 5 Soft Pull Credit Cards: November 2020 – Experts’ Choice

Top 5 Soft Pull Credit Cards: November 2020 – Experts’ Choice

Posted: June 3, 2020

When applying for a credit card, you definitely don’t want your credit score to go down. Here, you will find the best credit cards with a soft pull from our partners. An application for such cards won’t make changes to your credit history… Continue reading

Top 5 Store Credit Cards: November 2020 – Experts’ Choice

Top 5 Store Credit Cards: November 2020 – Experts’ Choice

Posted: May 30, 2020

We evaluated store credit cards offered by our partners to find the best store credit cards. They are often loaded with perks that will allow you to save on purchases at your favorite retailer. Plus, many store credit cards are available… Continue reading

You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!