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The Cost of Credit

Factors contributing to the cost of credit include:

  • Annual percentage rate (APR)
  • Periodic rates
  • Grace Period
  • Fees
    -Annual Fees
    -Late Fees
    -Over limit Fees
  • Balance calculation method
Credit card companies are required by the Federal Fair Credit and Charge Card Disclosure Act (FCCCDA) to provide you with information about the terms of their offers to you. This allows you to compare offers to choose the best option for you. APR is the amount of interest you will pay annually on your balance. The larger the interest rate, the more money you will pay. Periodic rate is the daily rate of interest that accumulates on the balance of your account. Grace period is the amount of time you have to pay your balance in full before interest starts accruing. Some cards do not have a grace period, which means you will still pay interest even if you pay the balance due in full by the due date. The more fees and the higher the fees the more you will pay to the issuer. Some fees include annual membership fees, late fees and over limit fees.
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This is a complicated area of law and an attorney should be consulted on all matters relating to bankruptcy. The information on this website is provided with the understanding that the authors and publishers are not herein engaged in rendering bankruptcy, legal, insolvency, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional bankruptcy, insolvency, tax, legal or other competent advisors. While we have made every attempt to ensure that the information contained in this website has been obtained from reliable sources, Credit Advisors Foundation and Arbor Investment are not responsible for any errors or omissions, or for the results obtained from the use of this information.