APR (Annual Percentage Rate): The ongoing annual interest rate associated with the card offer. Often, cards have an introductory APR on purchases or balance transfers that are different than the permanent APR. Interest rates can be fixed or variable. Note that some card offers will show a range of permanent APRs. This allows the issuer to approve more applicants for the card --- they can assign a higher APR to those applicants with lower credit scores.

Average Daily Balance: This is the amount on which your finance charges are calculated. For example, if your average balance is $1,000 and the APR is 12% (1% for one month), your finance charges will be about $10. There are a number of ways that the card issuer can calculate this balance. See Methods of Computing Average Daily Balance.

Balance Transfer: The ability to move balances to your credit card from another credit card or other debt obligation. There may be a transaction fee associated with these transactions.

Cash Advance: The ability to borrow cash against your credit line. Cash advances may take the form of an ATM withdrawal or perhaps a 'convenience' check that is provided by the credit card company for this purpose. Cash advances generally have no grace period, often have interest rates that are close to 20%, and usually come with an upfront fee. This is an extremely expensive way to borrow money, and is not recommended in most cases.

Charge Card: A type of card that does not extend credit beyond a single billing cycle: Payment in full is due each month.

Convenience Check: A feature of some card accounts that lets you write a check against your credit line. Basically the same as a cash advance.

Credit Card: A financial instrument that enables the user to buy goods and services today, for repayment at a later date. The card's terms and conditions, including interest rates and fees, dictate the rules for repayment.

Credit Line: The maximum amount of credit that the cardholder is approved to use.

Default APR: Most card disclosures now include an interest rate that your account can adjust to if you default under any of the card's terms. Some of these rates can be as high as 30% or more. One or more late or missed payments can put you in default, although the card issuer has a lot of flexibility when deciding if and how much to adjust your interest rate. Note that most cards now include a disclosure permitting them to adjust your rate based on just about any factor - including missed payments to other creditors. We suggest you glance at your statement interest rate each month to make sure it hasn't been changed (except for adjustments caused by variable interest rates).

Disclosures: By Federal regulation, the card issuer must make certain summary disclosures about the card offer when it is presented to the consumer. While this reporting doesn't provide every detail, it does let you more easily compare different card offers side by side. For a tutorial on these disclosures, click here.

Finance Charge: The interest cost of your credit. Finance charges are broken out separately on your card bill.

Fixed Interest Rate: An APR that does not vary due to changes in market interest rates.

Grace Period: A time period after the purchase of an item, usually 20-25 days, before which interest begins to accumulate on the credit extended for that item. Practically speaking, it means that users who pay their card balance in full each month can avoid interest payments. For these users, a credit card with no annual fee can be a convenient alternative to cash purchases.

Interest Rate: See APR

Late Fee: A charge assessed by the card company if payment is received after the due date of the bill. These fees often vary by your outstanding balance, but can be as high as $39. Additionally, late payments can trigger adjustments to your APR. See 'Default APR' for more information. Bottom line -- it is very important to make at least the minimum payment before the monthly due date.

Methods of Computing Average Daily Balance: There are a couple of methods banks use to calculate the balances against which they assess finance charges. The main two are Average Daily Balance and Two-cycle Average Daily Balance. Explaining the difference will make your hair hurt, but suffice it to say that the two-cycle method will probably cost you a little bit more in finance charges if you carry a balance.

Minimum Finance Charge: The smallest finance charge assessed IF a finance charge is due in a given month. Usually it is 50 cents or $1.00. If you carry a very small balance (e.g., under $100), the minimum finance charge can raise the effective interest rate you pay, but otherwise it is of fairly low importance in evaluating the overall value of the card offer.

Minimum Payment: An amount, usually about 3% of the outstanding balance that is the least that can be repaid each month. Paying less than the amount due will put your account past due, repeated instances of which can harm your credit rating.

Prime Rate: Historically, the rate that banks charged their best customers. The prime rate is the index which most variable rate cards use to determine the card interest rate. The prime rate tends to move with short-term market interest rates, and is particularly sensitive to changes in the rate that the Federal Reserve Bank will lend to commercial banks.

Over the Limit Fee: A charge assessed by the card company if you exceed your credit line during a billing cycle. You would think that the card would just be disallowed for the charge that would put you over the limit, but I guess the card companies consider it a courtesy to let you go over the limit--- a courtesy which they profit from. These fees often vary by outstanding balance, and run as high as $39.

Variable Interest Rate: An APR that can change over time based on the change in an underlying index. The most common index is the prime rate. For example, if the prime rate was 6%, and the card rate is prime rate + 5.9%, your rate would be 11.9%. Variable interest rate cards can have lower rates than fixed cards during periods of low rates, but you should be aware that your rate, and thus your finance charges could increase should market interest rates increase.