MyCardBlog

Below you will find a comprehensive list of credit cards with 5% rewards in specific purchase categories. If you want to find a great card, this post will be helpful for you. Please refer to the credit card issuers for more detailed information.
Bonus: bonus for new applicants—sign-up bonus
Rewards Limit:reward cap each year
Redeem For: rewards options which can be redeemed for GCs
AMEX Blue Cash
Bonus: none! Redeem For: cash.
You can earn 5% after your first $6,500 in total spending each year. If you use credit card a lot, e.g. use it to pay your rent, or mortgage, this would be your best card. After your initial $6,500 in spending per year, you can get 5% cash back on everyday purchase. Besides, you can also earn 1.5% on every other purchase.

Hilton HHonors Platinum AMEX
Bonus: 10,000 points. Redeem for: Hilton stays.
The rewards of this card are only valuable toward Hilton hotel stays. However, you can get 5 points for $1 spending at gas, supermarket, drug stores, US post office, restaurant, cell bill and Hilton hotels. Then you can get 3 points on other purchases. The value of a point is between 0.5 to 1.4 cents depending on how you can redeem those points. The first 4 stays at Hilton hotels can get 2,500 bonus points. Also if you are looking for hotel card, please refer to Starwood card from AMEX.

Discover Open Road
Bonus: none. Redeem For: cash, GC.
5% cash back on gas and auto repair service for the first $100 every month. The low limit and limited reward area hurt the reputation of this card. However, we seldom spend over $100 on gas. If you redeem the cash back for GC, you can earn 6.25% cash back. (student version)

MtvU visa from Citi
Bonus: none. Redeem For: GC, travel.
If you redeem the thankyou points as cash, you can’t get full 5% cash back. This card can help you get 5 thankyou points at dinning, Amazon and bookstores. You will also earch extra bonus for good GPA.

Advanta Platinum Business Card
Bonus:none. Redeem For: cash.
The great thing about this card is you can earn 5% cash back on broad spending. The credit requirement for this card is a little bit high.

Discover Business Card
Bonus: none. Redeem For: cash or GC.
While this card has a limited reward area—office supplies. You will also earn 2% on gas and 1% on other purchase.

American Express SimplyCash Business Card
Bonus: none. Redeem for: statement credit.
I’d like to say this is a perfect card! You can get 5% cash back on gas, office supplies and wireless service.

Discover More Card
Bonus: $40. Redeem For: cash and GC.
Get more program let you get 5% cash back quarterly on hotel stays, restaurant, gas, airplane tickets and much more. The drawback is you have to register you card accordingly. There is no foreign transaction fees for discover card. It’s a quite good card to own.

Other limited rewards cards

Citi Diver’s Edge Platinum Select Card
Bonus: none. Redeem For: GC, Travel, cash.
You can get 6% cash back on gas, supermarket and drug store for 12 months and then, 3% thereafter. Another feature of this card is you can get money—1 cent for 1 mile—for your driving. Check out his card at Citicards.com.

Citi Diamond Preferred Rewards card

Bonus: None.
You can get 5 thankyou points at supermarkets, drugstores and gas stations for 12 months and 1 thankyou point thereafter.

Citi Platinum American Express Card
Bonus: 15,000 points. Redeem For: cash or GC.
The annual fee for this card is free for the first year and then $99 after that. You can get 5 thankyou points at supermarkets, drugstores and gas stations for 24 months. At the same time, you can get 3 thankyou points on other purchases. After the promotion period, you can only get 1 thankyou point. But who want to keep this card after 1 year?

BP Visa Card
Bonus: none. Redeem For: BP GC.
This is a great gas card if you use BP gas all the time. You can get 10% cash back at the first 60 days. And then 5% cash back thereafter. Another great feature is you can get 2% cash back on dinning and traveling. You can buy some gift cards at the BP pump during the first 60 days.

Other cards: Shell gas card, marathon gas card, Hess gas card, Banana Republic Card, Hooters Card, BP visa Card.

These days I was always thinking one problem—”Can we save money by using credi card?” I hate to say that I found at last I paid more than I can save–that’s I can see the money in the checking account is increasing day by day ot month by month! We are always talking about deals from credit card companies—get higher cash back and get sign-up bonus. Yes. It’s great if we can get better cash back and sign-up bonus. However, here comes the problem—are we spending more when we using credit card? We pay whatever we want by credit cards and pay off the balance every month. With credit cards we can afford what we actually coudn’t “afford”. When you check out with “real” money, you can feel the money is “slipping away”. Ans then you would say ” Emmm……I should save some money.”

Last Sunday, when I went to Walmart, I noticed that a 26 inch Sharp LCD HDTV is on sale—from $699 to $347. Oh yeah! What a great deal! Then I decided to buy it, although I have already had a TV. I swiped with Starwood Card from AMEX (which is my favorite card now check it out here). I didn’t have the feeling that i spent $347!!! That’s the problem. When I checked my account at AMEX—I was trying to think of a way to pay the balance—$500 for only one week! I activated just one week ago—in order to put the statement closing date with blue from AMEX together. Maybe this is only my problem—I can’t control my budget! If you can control your spending, then you shouldn’t have the problem. But I really should start to ask myself—why not carry only one card in my pocket and think before swiping the card. But I should say credit cards make things convenient. So my conclusion is credit card would bring convenience for you if you can limit your spending. If you can’t control your spending like me, then you should start to think about it. Anyway, save money is not an easy job, at least, for me. How about you?

On this blog, I believe you have seen mentions of lots of credit card sign-up bonus. Of course, credit card companies won’t offer bonuses as charities do. They want to make money from you. Once you have taken advantage of it, they want to take advantage of you too. Here is how credit card companies earn revenues.

Interchange fees (Discount rate)
Interchange fees are charged by the merchant’s acquirer to a card-accepting merchant as component of the so-called merchant discount rate (also referred to as “merchant service fee”). The merchant pays a merchant discount fee that is typically 2 to 3 percent (this is negotiated, but will vary not only from merchant to merchant, but also from card to card, with business cards and rewards cards generally costing the merchants more to process), which is why some merchants prefer cash or debit cards. And when you give them a card, they will ask you whether this is a credit card or debit card. The majority of this fee, called the interchange fee, goes to the issuing bank, but parts of it go to the processing network, the card association (American Express, Visa, MasterCard, Discover, etc) andhe merchant’s acquirer. With a corporate card, the interchange is also often shared by the company in whose name the card is issued as an incentive to use that issuer’s card instead of someone else’s.

The interchange fee that applies to a particular merchant is a function of many variables including the type of merchant, the merchant’s average transaction amount, whether the cards are physically present, if the card’s magnetic stripe is read or if the transaction is hand-keyed or entered on a website, the specific type of card, when the transaction is settled, the authorized and settled transaction amounts, etc. For a typical credit card issuer, interchange fee revenues may represent about fifteen percent of total revenues, but this will vary greatly with the type of customers represented in their portfolio. Customers who carry high balances may generate low interchange revenue due to credit line limitations, while customers who use their cards for business and spend hundreds of thousands of dollars a year on their cards while paying off balances every month will have very healthy interchange revenues.

Interest on outstanding balances
Interest charges vary widely from card issuer to card issuer. Often, there are “teaser” rates in effect for initial periods of time (as low as zero percent for, say, six months), whereas regular rates can be as high as 40 percent. In the U.S. there’s no federal limit on the interest or late fees credit card issuers can charge; the interest rates are set by the states, with some states, like South Dakota, having no ceiling on interest rates and fees, inviting some banks to establish their credit card operations there. Other states, like Delaware, have very weak usury laws. The teaser rate no longer applies if the customer doesn’t pay his bills on time, and is replaced by a penalty interest rate (for example, 24.99%) that applies retroactively. So customers should be wary of these offers that usually contain some traps. Cash withdrawals will never carry the teaser rate, for example.
Fees charged to customers
The major fees are for:

Late payment fees Charges that result in exceeding the credit limit on the card (whether done deliberately or by mistake), called overlimit fees
Returned check fees or payment processing fees (e.g. phone payment fee)
Cash advances and convenience checks (often 3% of the amount). Transactions in a foreign currency (as much as 3% of the amount). A few financial institutions do not charge a fee for this.
Membership fees (annual or monthly), sometimes a percentage of the credit limit. Issuers love monthly fees as it allows them to charge substantial amounts without the customer realizing how expensive the charge really is (a monthly amount is perceived as half the price of the equivalent annual fee)

Other service revenues
A lot of credit card companies are trying to sell their payment protection plans, or other financial related services. E.g. the Chase Payment Protector, Chase Fraud Detector, Credit Secure from American Express, IdentityMonitor from Citi etc.

Industry jargon for customer categories
Customers who do not pay in full the amount owed on their monthly statement (the “balance”) by the due date (that is, at the end of the “grace period”) and are not in a promotional period owe interest (“finance charges”) are known in the industry as “revolvers.” Those who pay in full (pay the entire balance) are known in the industry as “transactors,” “convenience users,” or “deadbeats.” Those that shift usage of their credit cards or transfer balances frequently are known in the industry as “rate surfers”, “rate tarts” or “gamers.” So which category are you in?

Sander left a comment on Citi Chairman Card. So I gathered some information about the American Express Centurion Card. Let’s learn something about the most mysterious card in the world. The Centurion Card is so exclusive that you can’t find any details of it on the American Express website.

This card was launched in October 1999, which was available to selected holders of its Platinum Card. It was said the first holder of this card is Italian Princess Dionne Leslie. At that time, the annual fee was $1,000. However, in 2007, in the United States, the requirements include minimum annual spending of $250,000. Also there is a $5,000 one-time invitation fee for new card holders, plus the $2,500 annual fee.
This famous Black American Express card was initially made by plastics. From 2006, a new centurion card crafted from anodized titanium was issued to replace all of the plastic cards. So there is no plastic Centurion Card now.
Card Benefits:
Gold Status for Delta, Continental and US Airways and Gold Elite Status with Virgin Atlantic Airways
Cardholders can also access Continental’s Presidents Lounge, Delta Crown Room Club and NorthWest Airlines World Club when you are flying on their airlines. You also get access to Priority Pass Lounges regardless of which airlines you fly. Priority Pass has over 450 airport lounges worldwide.

Elite Hotel Status
The elite status available to centurion members has been the latest controversy among cardholders. When the centurion card was first marketed, cardholders automatically qualified as Diamond (Elite) status for Hyatt, Gold Status (mid-tier) for Hilton HHonors program, Platinum status for Starwood Preferred Guest Program, and also elite status for Intercontinental Hotels and Resorts. The perk that was coveted by centurion members was the Platinum Status of the Starwood Preferred Guest program. That was because Starwood has probably the best hotel frequent guest program with no blackout dates and suite upgrades for platinum members. Centurion cardholders often sited the room upgrades from Starwood Hotels essentially cover the cost of the card. Starwood also allows members to transfer points into airmiles at very favorable terms.

Fine Resorts and Hotel Program
Centurion has over 550 hotel partners around the world. When you make reservations through centurion travel service, you will receive room upgrades at check-in when available, continental breakfast for two, guaranteed 4pm late checkout and complimentary amenities depending on the hotel property.
But the most important benefit under this program comes from the Mandarin Oriental and Ritz Carlton. When you book a room at the Ritz Carlton, you will get a room upgrade at the time of your reservations and you will also get a $50 spending credit. For any reservations at the Mandarin Oriental, you will get a room upgrade upon reservation and also another room upgrade at check-in (that’s 2 upgrades). You will also receive from centurion a “Buy One Get One Free Night” coupon for each and every Mandarin Oriental Properties (except Mandarin NY). If you are a business man, and want to save a lot of money on it. This card is a good deal.

Baggage Insurance
If you book your travel tickets using your centurion card, you have up to $1,250 in baggage insurance for your carry-on luggage and $500 in checked-in luggage in addition to the insurance provided by the carrier.

Centurion and Departure Magazines
Since the inception of the card, members have received a copy of Departures magazine, which is also sent to all Platinum cardholders. However, in 2004, American Express Centurion members began to receive an exclusive “no name” magazine which was not available by any other means. Starting with the spring 2007 edition, this magazine has been officially entitled “Black Ink.” arture magazine, which is a magazine on luxury lifestyle.

Other by Invitation Only Events
As a centurion card member, you will be getting lots of mails and invitations to exclusive events.

Who have this card?
There are about 10,000 card holders worldwide (rumor?), including Paris Hilton, Jessica Simpson, Lindsay Lohan……….
The famous black card has also appeared on the TV shows:

In season 1 of the ABC show Traveler, Tyler Fog’s father tells his son to use the black card given to him for emergencies to withdraw as much money as possible from an ATM to run for authorities.

In season 2 of the Fox show The O.C., Julie Cooper-Nicol mentions she is going to pay for a pony with her real estate baron husband’s Black Card.

In the Discovery Channel Show Build It Bigger in the episode about racing boats, after a jet engine is destroyed, John Haggin is asked how they will pay for the new part. After pulling out his wallet, he reaches in and pulls out a Balck Card, displaying it to camera.

We are expecting more returns by swiping Credit Cards. Although I believe credit card issuers gain a lot of profits from their card holders, we should also consider the costs of credit card issuers. The high returns come with high risks. Let’s see the costs of the credit card issuers. (in part adapted from Wiki)
Credit card issuers (banks) have several types of costs:
Operating costs
This is the cost of running the credit card portfolio, including everything from paying the executives who run the company to printing the plastics, to mailing the statements, to running the computers that keep track of every cardholder’s balance, to taking the many phone calls which cardholders place to their issuer, to protecting the customers from fraud rings. Depending on the issuer, marketing programs are also a significant portion of expenses.

Interest expenses
Banks generally borrow the money they then lend to their customers. When we use our credit cards, we borrow the money from card issuers for about 1 month. However, credit card companies have to put the money in the merchants’ accounts in their banks. (A huge cost!) As they receive very low-interest loans from other firms, they may borrow as much as their customers require, while lending their capital to other borrowers at higher rates. If the card issuer charges 15% on money lent to users, and it costs 5% to borrow the money to lend, and the balance sits with the cardholder for a year, the issuer earns 10% on the loan. This 5% difference is the “interest expense” and the 10% is the “net interest margin”. This is especially true for American Express. Don’t like Chase and Citi, they don’t have a chance to get money out of their own bank.

Rewards
Many credit card customers receive rewards, such as frequent flier points, gift certificates, or cash back as an incentive to use the card. Rewards are generally tied to purchasing an item or service on the card, which may or may not include balance transfers, cash advances, or other special uses. Depending on the type of card, rewards will generally cost the issuer between 0.25% and 2.0% of the spend. Networks like Visa or MasterCard have increased their fees to allow issuers to fund their rewards system. However, most rewards points are accrued as a liability on a company’s balance sheet and expensed at the time of reward redemption. As a result, some issuers discourage redemption by forcing the cardholder to call customer service for rewards. On their servicing website, redeeming awards is usually a feature that is very well hidden by the issuers. Others encourage redemption for lower cost merchandise; instead of an airline ticket, which is very expensive to an issuer, the cardholder may be encouraged to redeem for a gift certificate instead. With a fractured and competitive environment, rewards points cut dramatically into an issuer’s bottom line, and rewards points and related incentives must be carefully managed to ensure a profitable portfolio. There is a case to be made that rewards not redeemed should follow the same path as gift cards that are not used: in certain states the gift card breakage goes to the state’s treasury. The same could happen to the value of points or cash not redeemed. Also don’t forget the sign-up bonus from credit card companies. Usually we can get $50 to $250 cash or gift certificate as a bonus for being a new card holder.

Fraud
Where a card is stolen, or an unauthorized duplicate made, most card issuers will refund some or all of the charges that the customer has received for things they did not buy. These refunds will, in some cases, be at the expense of the merchant, especially in mail order cases where the merchant cannot claim sight of the card. In several countries, merchants will lose the money if no ID card was asked for, therefore merchants usually require ID card in these countries.
The cost of fraud is high; in the UK in 2004 it was over £500 million. Credit card companies generally guarantee the merchant will be paid on legitimate transactions regardless of whether the consumer pays their credit card bill. “Soft fraud” is fraud committed by the customer himself: getting a card and using it with no intention ever to repay the balance. Such customers are called “diabolicals” by the credit card companies, which try to avoid them at all cost.

Charge offs
When a consumer becomes severely delinquent on a debt (often at the point of six months without payment), the creditor may declare the debt to be a charge-off. It will then be listed as such on the debtor’s credit bureau reports (Equifax, for instance, lists “R9″ in the “status” column to denote a charge-off.) It is one of the worst possible items to have on your file. The item will include relevant dates, and the amount of the bad debt. A charge-off is considered to be “written off as uncollectible.” To banks, bad debts and even fraud are simply part of the cost of doing business. However, the debt is still legally valid, and the creditor can attempt to collect the full amount. This includes contacts from internal collections staff, or more likely, an outside collection agency. If the amount is large (generally over $1500 – $2000), there is the possibility of a lawsuit or arbitration. In the US, as the charge off number climbs or becomes erratic, officials from the Federal Reserve take a close look at the finances of the bank and may impose various operating strictures on the bank, and in the most extreme cases, may close the bank entirely. (Several days ago, I heard that somebody transferred $30,000 from Citi and then went back to China. Citi won’t go to China and sue him. This is a reason why some credit card issuers state that you must be a US Citizen.)

Although using a credit card is an easy job for us, it’s not easy to finish the transaction. Use a credit card involves a lot of parties. And usually, it takes several days to settle down the transaction until it finally appear on your account.

Parties involved
Cardholder: The owner of the card used to make a purchase; the consumer.
Card-issuing bank: The financial institution or other organization that issued the credit card to the cardholder. This bank bills the consumer for repayment and bears the risk that the card is used fraudulently. American Express and Discover were previously the only card-issuing banks for their respective brands, but as of 2007, this is no longer the case.
Merchant: The individual or business accepting credit card payments for products or services sold to the cardholder.
Acquiring bank: The financial institution accepting payment for the products or services on behalf of the merchant.
Independent sales organization: Resellers (to merchants) of the services of the acquiring bank.
Merchant account provider: This could refer to the acquiring bank or the independent sales organization, but in general is the organization that the merchant deals with.
Credit Card association: An association of card-issuing banks such as Visa, MasterCard, Discover, American Express, etc. that set transaction terms for merchants, card-issuing banks, and acquiring banks.
Transaction network: The system that implements the mechanics of the electronic transactions. May be operated by an independent company, and one company may operate multiple networks. Transaction processing networks include: Cardnet, Nabanco, Omaha, Paymentech, NDC Atlanta, Nova, Vital, Concord EFSnet, and VisaNet.
Affinity partner: Some institutions lend their name to an issuer to attract customers that have a strong relationship with that institution, and get paid a fee or a percentage of the balance for each card issued using their name. Examples of typical affinity partners are sports teams, universities and charities.
The flow of information and money between these parties — always through the card associations — is known as the interchange, and it consists of a few steps.
Transaction steps
Authorization: When the cardholder pays for the purchase, the merchant performs some risk assessment and may submit the transaction to the acquirer for authorization. The acquirer verifies with the issuer—almost instantly—that the card number and transaction amount are both valid, and informs the merchant on how to proceed. The issuer may provisionally debit the funds from the cardholder’s credit account at this stage.
Batching: After the transaction is authorized it is then stored in a batch, which the merchant sends to the acquiring bank later to receive payment (usually at the end of the day).
Clearing and settlement: The acquiring bank sends the transactions in the batch through the card association, which debits the card-issuing bank for the transaction amount, and credits the acquirer for the transaction amount minus the interchange fee.
Funding: The acquiring bank pays the merchant. The amount the merchant receives is equal to the transaction amount minus the discount rate charged by the acquiring bank to the merchant for the service.
The entire process, from authorization to funding, usually takes about 2-7 business days. However, many merchant card processors offer next-day deposits to customers subject to type of banking account.
In the event of a chargeback (when there’s an error in processing the transaction or the cardholder disputes the transaction), the issuer returns the transaction to the acquirer for resolution. The acquirer then forwards the chargeback to the merchant, who must either accept the chargeback or contest it.
Ok. Next time, let’s see how can a credit card issuer can make profits from this process.

Used wisely, credit cards can help you make the most of your financial resources. You can use cards to make some purchases more easily and securely — like travel reservations or concert tickets — and they can even help you budget and save. But to enjoy these benefits, you need to choose a card that’s right for you, and use it carefully.

The right credit card
To find the best card for you at the lowest cost, you need to consider these three major factors: Interest rate, Grace period and Annual fee. But for most of us, I think the top factor is sign-up bonus and other 0% APR on purchase and BT offers.
Not all cards charge an annual fee, so you may be able to avoid that cost entirely. But be sure to read the fine print: Some no-fee cards start charging a fee after the first few months. (Of course, you can choose to cancel it.)

A card’s grace period and interest rate probably have the greatest effect on the cost of credit. A grace period is the number of days before a company starts charging interest on new purchases. If there’s no balance due on your card, no interest will be charged from the statement closing date through the day payment is due. But if there’s a balance, the grace period is eliminated. And some cards have no grace period, which means interest starts being charged on that purchase immediately. (You should also be aware that some cards may charge interest on new purchases.)
If you pay your bill in full every month, having a grace period may mean you never pay interest. And the longer that period is, the easier it may be to pay in full each time. But if you regularly carry a balance, finding a card with a lower interest rate will be more important to you than finding one with a long grace period.
Affinity cards
You might also be tempted by affinity cards: cards that give you travel miles, cash back, discounts or make charitable donations to a favorite cause. Before signing up for one, be sure it fits your credit needs first-and that the interest and fees won’t outweigh the potential benefits. You might also want to calculate how much you’ll have to spend to actually qualify for a free airline ticket or other reward.
Using a credit card wisely
The freedom a credit card offers may be exciting at first, but it’s important to take the responsibility of credit seriously. Using your card wisely may help you stay out of credit trouble and avoid getting into debt. The first step is matching your spending style to what you can afford to repay when the bill arrives or within a few months.
To avoid overspending, it’s always recommended that you create a budget for your household, and keep your spending in those guidelines. If you’re unsure if or when you’ll have the money to pay off a purchase you need to put on a credit card, it’s probably safest not to make that purchase.
Write it down
You should save your credit card receipts and write down how much you’ve spent, so that your monthly bill isn’t a big surprise. Tracking your spending will also help prevent you from going over your credit limit, which can incur hefty fees.
Billing mistakes
If you notice a mistake on your bill, by law you have 60 days to notify the lender about the error-whether it’s an unauthorized charge, an incorrect payment, or a computer mistake. Your lender must acknowledge your notification in 30 days, and must resolve your issue within up to two billing cycles, but not more than 90 days. (I doubt about this. You’d better continue to pay the disputed charges and then wait for refund as Linglin said.)
You can still use your card while you’re disputing a charge, as long as you pay the rest of your bill. You will not have to pay for those purchases or charges you are disputing, but you will have to continue to pay undisputed charges or new charges made after your dispute is filed. The law that protects your rights when it comes to billing mistakes is the Fair Credit Billing Act.
I remember someone was charged late fee by AMEX and did nothing but waited. Then AMEX transferred the finance charge to a collection agency. There is a collection on his credit report. Following is what I wrote to him: “But you should learn a lesson from this case, when you owe some money (actually not) on your credit card. You should pay it before due date. At the same time, you should try your best to dispute with Credit Card Company. Then they will refund credit to your account after they finish the dispute. Don’t leave it away and do nothing. All the credit card companies have well-developed rules. You might not understand, but it a rule. Be careful next time and good luck this time.”
Limit your credit
You may find it easier to control your spending if you limit yourself to having just a few credit cards, and don’t carry them with you all the time. The fewer cards you have in your pocket, the less likely you may be to buy something on impulse.

In the following days, I will post some basic knowledge about credit card. Most of the materials are from HSBC. They really have done a good job on introducing basics about credit card. I hope this will be helpful for you all.

Credit Cards
The money you spend when you use a credit card isn’t really yours — you’re actually borrowing it from the bank or other financial institution that issues the credit card, in an arrangement called revolving credit. (Revolving credit-A credit arrangement that lets you borrow up to a certain credit limit for a defined period of time. The balance may fluctuate from zero up to the maximum amount.) You have access to a fixed amount of money, called your credit limit. (Credit limit-The maximum amount you can borrow in a revolving credit arrangement.) Once you repay any of the money you have spent, you can borrow that amount all over again.
What you borrow, or what you spend, is called principal. (Principal-For a mortgage or other loan, the amount you borrow. When investing, principal is the amount of your initial investment. If you buy a bond, the principal is the amount you invest and the face value of the bond.) For the privilege of using the principal, you pay the credit card issuer a finance charge, (Finance charge-The total dollar amount your loan will cost you, including interest, points and fees.) which is the interest (Interest-In a credit arrangement, the amount, figured as a percentage of your unpaid balance, you pay the lender. With a savings account, the amount a bank pays you for keeping your money on deposit. Interest is usually figured as a percentage of your total deposit. Simple interest is calculated only on the principal. Compound interest is calculated on the principal and any earnings or interest that accumulates.) that accumulates on any unpaid balance. For example, if you have a balance of $600 on a card with an annual interest rate of 18%, your monthly finance charge will be $9. It’s calculated by multiplying a month’s worth of interest — 1.5% — times the balance.

Every credit card company has to disclose the interest rate it charges on the balance you carry, and different cards charge different rates so it’s worth shopping around. Some list their monthly or daily interest rates, but you can compare different cards by looking for the annual percentage rate (APR), ( The APR represents the cost of credit on a yearly basis represented as a percentage. It includes interest and other costs as amortized over the life of the loan.) which all card issuers are required to disclose. A card’s APR doesn’t include any late fees, annual fees or other charges, so if you’re comparing rates, be sure to take into account all additional fees.

Secured Credit Cards
Another option you can consider is a secured credit card, which means that your card is attached to a savings account that is pledged to the bank that issues the card. You deposit a sum of money that you won’t be able to touch, but you can charge up to that amount on your card. The deposit account is in your name, but if you don’t pay your bills, the card’s issuer can take what you owe out of your account. Secured cards may be a good choice if you’ve had credit problems, and are having trouble being approved for a credit card. If you regularly pay what’s due on a secured card, you may be able to qualify for a regular, unsecured card after a certain period of time. (If you have a secured card and believe you’ve demonstrated your creditworthiness, don’t hesitate to ask for a regular card. Even if you have to wait a bit longer, you may help speed up the process by indicating to the lender that you’re interested in receiving a regular bankcard, and may be shopping for such a card with other lenders.)

Charge Cards
Charge cards let you make purchases as you would with a credit card, and usually don’t impose a credit limit or state an APR. But you have to pay off the entire amount you’ve charged each month, rather than carrying a balance as you can with a credit card. Some well-known charge cards are issued by American Express, Diner’s Club and Carte Blanche.