Credit card features

back and bite you in the end. All credit cards offer a variety of features. Knowing and understanding these credit card features will help you to decide which card is right for you.

Credit card fees
Most credit cards charge fees for various things, and it is important to know what these fees are and how to avoid them.

1. The annual fee

Some credit card companies charge you an annual fee just for using their card. It's not as common as it once was, but it's still around. Because of stiff competition, you can often negotiate this fee away if you call and speak to a customer service representative. You should be especially careful to check for fees on Gold and Platinum cards – even though they're not that hard to get any more, they still tend to charge much higher fees than normal cards.

2. Cash Advance Fee

Most credit card companies will charge you a fee for cash advances. These fees can vary but are usually somewhat hefty. Not only will they charge you a one-time fee, but the interest rate for this money will be at a considerably higher rate. Plus, unlike a regular purchase, where interest begins accruing after some grace period passes, cash advances accrue interest charges from day one.

Many card companies are competing for your business and are now offering an introductory cash advance and balance transfer rates for a specific amount of time. This lower rate can be applied to any balances you may wish to transfer from another card. Although it sounds good, some companies will charge you a fee for the transfer. Know what the fee is before you transfer any balances.

3. Miscellaneous Fees

Things like late-payment fees, over-the-credit-limit fees, set-up fees, and return-item fees are all quite common these days and can represent a serious amount of money out of your pocket if you get whacked for any of these fees.

Credit card APR
APR stands for "Annual Percentage Rate". It is the amount of money that you will pay, expressed as a percentage, for the privilege of charging purchases and carrying a balance. This is a biggie. The APR can drastically change your ability to pay off your card, particularly if you carry a balance. The APR attached to the credit card can vary not just from card to card but also from how and what you purchase. Read more about this important feature in this credit card apr article.

Credit card incentives
Since there are so many credit card companies, competition is stiff. Adding incentives to their offers is one of the more popular ways to tip the scales in their favor. Credit cards with incentives like rebates on purchases, frequent flyer miles on certain airlines, and extended warranties on purchases are just a few of the bonuses that card companies will now offer.

For those of you who collect and use your frequent flyer miles, they also have added incentives like travel insurance and car rental insurance for your convenience. Of course, they are hoping that with all this traveling, you are using their card to foot at least some of the bill.

Credit card rewards
Many card companies are looking to keep your business and are therefore making it worth your while to use their card. Just simply by using their card you can accumulate points that will in turn earn you rewards. What kind of credit card reward program depends solely on the amount of points you accumulate. Since you can't accumulate these points without charging things on your card, this is a classic case of 'you have to spend money to save money'.

Bottom line is this: Know what you need and what you don't. No sense in paying for any features that you won't use.

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