Released May 9, 2008

MARION, Ark. - Comparing credit card offers can save money on interest and fees, says VeEtta Simmons, Crittenden County extension agent for the University of Arkansas Cooperative Extension Service.

"Look for features specifically meeting your credit card needs," Simmons says.

The first step in choosing a credit card is to think about how you will use it.

"If you expect to pay your monthly bill in full, your better choice may be a card that has no annual fee and offers a longer grace period," says Simmons. "If you’ll be carrying a balance, though, a lower annual percentage rate is a better feature."

Look for a card that carries a lower APR as well as lower fees on cash advances if you’ll use the card primarily for a cash advance. Some companies charge a higher APR for cash advances than for purchases.

APR is the interest rate paid if a card carries a balance. APR is also paid on cash advances or transferring the balance of card to another one.

"APR can be fixed or variable, but consumers need to be aware that APR can increase with late payments," Simmons says. "Also, APR does not include monthly or daily compounding of finance charges, additional fees or factors eliminating the grace period, all of which can raise the cost to consumers. The following are additional fees associated with credit cards: annual, cash advance, balance transfer, late payment, over the limit, set up or processing, return check and miscellaneous fees charged by the company.

Credit is a valuable tool if used wisely. For more information on financial resource management, visit http://www.uaex.edu. The Cooperative Extension Service is part of the U of A Division of Agriculture.

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http://www.uaex.edu/news/may2008/0509creditcards.htm

Contact: Elizabeth Fortune, (501) 671-2120, efortune@uaex.edu