Credit card terms and conditions

Each card you have is subject to a cardholder agreement of some sort. Unless you have a clear understanding of what you're getting yourself into, you should refrain from signing anything! Some of the terms and conditions you'll see will include:

(1) Annual Percentage Rate (APR) is the interest rate you'll incur if you carry a month-to-month balance. There are APRs attached to multiple things, such as an introductory APR which is in effect for a set period of time. Once the introductory period is over, a pre-arranged APR rate applies. There is also something that's known as a "Penalty APR," a higher rate charged when the cardholder is late or a check is bounced.

Additionally, there can be variable and non-variable rate APRs. A variable rate APR means that the rate can change – and can do so without any advance notice (if the prime rate changes). A non-variable APR rate remains the same for the agreed-upon amount of time, and does not change when the prime rate fluctuates.

(2) You can use your card to get a cash advance, which can be done at an ATM. In most cases, the interest charged for a cash advance is higher than the standard rate.

(3) An annual fee is a yearly fee connected to a card. Some have fees, others do not. Fees can be up to several hundred dollars, especially when premium rewards are involved.

(4) A cardholder's minimum monthly payment is the minimum amount he/she is expected to pay each month.

(5) There is a monthly payment due date, which is the last day a payment will be processed without any penalty to the cardholder.

(6) Your daily periodic rate is your rate divided by 365, the number of days in a year.

(7) If you have a difference of opinion with your card issuer, you can go to arbitration, a way to resolve disputes.