Buying now and paying later can add up. If you carry a balance on your credit card from month to month, you’ll pay interest on that balance every month. If you ever miss a payment, your interest rate will go up, so you’ll pay even more.


  • If you’re getting a credit card, compare at least three different cards. Look at:
    • the annual fee: how much you pay to use the card for a year 
    • the annual percentage rate (APR): The APR is the cost of credit expressed as a yearly rate. Your credit history, current finance rates, competition, market conditions, and special offers are among the factors that affect your APR. Try to negotiate the lowest APR just as you would negotiate the price of a vehicle.
    • how much interest you pay in a year on balances you carry each month. The higher the APR, the more you’ll pay.
    • fees – how much will you pay if a payment is late? What about if you go over your credit limit?
    • the grace period, which is the time between when you spend the money and when the card company charges you interest. You want at least 25 days to pay, if available.
    • other incentives, like airline miles, cash back, or donations to charities
  • Considering a store card to get a discount? Ask the same questions before you apply.
  • Try to pay your whole bill every month.  That way, you avoid interest charges. It will also help you build the best possible credit history. If you just can’t pay in full, make at least the minimum payment before the due date.
  • How many credit cards you choose to have depends on your situation and preferences. Using credit cards responsibly helps build your credit record. A greater number of cards may tempt you to spend more and may be challenging to keep track of.  It might also have a negative effect on your credit score.
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Tools for Personal Financial Managers