Understanding credit card terms can help you to be more aware of precisely what is stated in the fine print of your credit card application and contract.  Here are some of the most important terms in the field of credit cards and what they mean for you.
 
Average Daily Balance: The Average Daily Balance is the average dollar amount that exists on the card at any given point in time.  Over a period of time, usually thirty days or the number of days in a month, the total balance is added up and then divided by the total number of days.  The Average Daily Balance is used by credit card companies in the Average Daily Balance Method to determine the amount of interest due on a credit card.

Annual Percentage Rate:  The Annual Percentage Rate is the total amount of money that a person will pay each year in interest on the amount of money that they spend with the help of their credit card.  It is important to be aware that you will not just have the pay interest in the form of the Annual Percentage Rate, but there will also likely be simple interest attached to your purchases as well.  The lower APR you can secure with your credit card, the better.  Credit Card companies are required by law to reveal to you the APR for their cards.

Cardholder Agreement: A Cardholder Agreement is probably the most important document that you will receive from the credit card companies with which you work.  This agreement will cover all specifics of the agreement that applicable to your relationship with the credit card company including any legal options available to you if you have a problem with the company.  All questions dealing with the terms and regulations of the agreement can be found in this document.

Cash Advance Fee: When you use your credit card in order to get cash up front, you will be charged a specific fee just for getting this cash.  This is an up-front fee that needs to be paid by the card holder.

Finance Charge: Finance charges can take the shape and form of many different charges on your credit card bill.  In general, a finance charge is any amount representing the cost of using or borrowing money, in this case through the use of a credit card.  These fees can include interest and transaction fees, late fees, over the limit fees and more.

Grace Period:  The Grace Period is the length of time between the due date of your payment and the date on which penalties will start to accrue, due to the lateness of the payment.

Minimum Payment:  This is the very least amount of money that needs to be paid to the credit card company that you utilize.  It is a fraction of your total balance due.

Periodic Rate: The Annual Percentage Rate (APR) is used in order to calculate your annual interest rate, but the periodic rate looks at the amount of money due in interest for each period.  Usually, the period of a credit card is one month.  You can determine your Periodic Rate by dividing your APR by the twelve months within a single year.  If your APR is twenty-four percent, you would divide twenty-four by the twelve months in a year, and the Periodic Rate would be calculated as two percent.

Variable Interest Rate:  Your variable interest rate will move up and down over time, based on the changes that may occur in the market.

Balance Transfer:  Transferring your debt from one credit card to another is known as a balance transfer.  The entirety of the amount due on your one credit card will be transferred to the other through this process.