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When it comes to finding a new credit card, you may not have as much choices as people who curently have good credit. Nevertheless, you should still do some comparison shopping to be sure you are getting the very best deal available to you. Charge card terms and interest rates vary – and some of these variations can make an enormous difference to your wallet. Always look for the card with the very best interest rate and terms.

Here’s what you should look for in credit cards:

1. Avoid high interest rates. Credit card companies disclose the interest rate in a number of ways, but you desire to look at the APR (APR). This is the quantity of interest, transaction fees, along with other charges that you will pay per year, expressed as a percentage. It’s the best indicator of the actual interest you will pay.

2. Avoid low introductory rates. Some cards have a minimal “introductory rate” (also called a “teaser rate”). Following a few months, the interest rate will skyrocket. Also, sometimes the advertised rate only pertains to certain people, such as those earning a higher income. The card issuer charges a much higher rate to those that don’t qualify – which could mean an unpleasant surprise whenever your first bill arrives.

3. Understand interest calculations. Many banks today charge interest in line with the average daily balance. This is one way it works: Say you charge $1,500 on your own charge card and pay $1,200 on the deadline. Whenever your next bill arrives, a bank using the average daily balance will charge interest on the $1,500 average daily balance from the previous month, not on the $300 you still owe.

4. Review the grace period. This is actually the interest-free period of time between the purchase date and the bill deadline. It is usually available only to those who do not carry a balance. If you pay your bill in full each month, be sure to have a grace period. Otherwise, you’ll pay interest from the date of one’s purchase. If you carry a balance, a grace period isn’t important.

5. Avoid high annual fees. Some credit card issuers charge you a flat fee (besides interest along with other charges) for using their card. Some do not. In the event that you pay off your balance every month, you want a card lacking any annual fee. If you carry a balance, a card with an annual fee but a low interest rate may be better than a card with no annual fee but a higher interest rate.

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