Redwood Credit Union

Let's Talk Rates Did you know your credit card's APR can vary depending on the type of transaction and even the time period? It's true! Here are some basic APR types you may encounter as a cardholder: P u r c h a s e A P R As the name implies, this is the rate you'll pay on any purchases made with your credit card. I n t r o d u c t o r y (o r P r o m o t i o n a l ) A P R This is a lower interest rate you'll pay for a limited period of time. P e n a l t y A P R If you don't abide by your card's terms and conditions (for example, if you make a late payment), you may have to pay a higher rate called a penalty APR. B a l a n c e Tr a n s f e r A P R This is the rate you'll pay on any balances transferred to your credit card account. (Your balance transfer APR may be the same as or different from your purchase APR.) C a s h A d v a n c e A P R Usually higher than your purchase APR, the cash advance APR is the cost of borrowing cash from your credit card—and should be used sparingly. Decisions, Decisions... Choosing a Credit Card That Works for You With the seemingly endless array of credit card options these days, selecting your best match can be difficult. Keep these tips in mind to give structure to your search and help guide your decision-making: APRs: A card's APR (or annual percentage rate) can be defined as the cost of borrowing money. A lower APR means you'll pay less in interest. Fees: Fees can include annual fees, over-limit fees, balance transfer fees, late fees, and more. Take note of all fees, along with their corresponding amounts. Benefits: Weigh the advantages of any perks, such as rewards points (and what it takes to earn them), extended warranties, travel assistance, etc. COMPARE THE FOLLOWING FEATURES: An extremely low introductory rate or a discounted purchase for opening a store credit card can be tempting. But always pay attention to a card's long-term features. If the store credit card comes with sky-high rates and fees, it probably isn't worth a one-time discount. THINK LONG TERM Cards that offer numerous perks often come with higher interest rates and/or higher fees. For experienced cardholders, these offers can be a great deal. But for beginners, it might be best to start with a more basic card that offers lower rates and fees. START WITH THE BASICS

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