Credit, debit and charge cards, oh my! – Part 2

Understand terms and conditions before signing on the dotted line.

Today, consumers have a variety of products and services to choose from to help make their shopping experiences quick, easy and efficient. With so many options it is important to understand their similarities, differences and potential fees. The first article in this series focused on debit and charge cards. This article will highlight credit cards.

Credit cards allow consumers to make purchases and pay for them over time. If bills are not paid on time or in full than you will owe a finance charge. Finance charges depend upon your outstanding balance and the annual percentage rate of your card (APR). Things to consider with this type of payment option:

  • Shop around for a credit card that best meets your needs and make sure you understand the terms and conditions of the card you chose. Remember, interest rates, fees, finance charges, and APR’s can vary greatly.

(Tip: For more information on how debit cards and credit cards differ, visit

  • Be aware of fees. Some credit card issuers will charge a fee for cash advances, late payments, exceeding your limit and a monthly fee, whether you use the card or not. Also, some credit cards charge an annual fee.
  • For unauthorized purchases, you may be responsible for up to $50.00 per card. If you report the loss of your credit card before it is used you can’t be held responsible for any unauthorized charges. The Federal Trade commission (FTC) recommends reporting a lost credit card immediately via phone, and also suggests following up this report in writing: i.e. include your account number, the date you first noticed the card was missing and the date you reported the card being lost.

(Tip: For more information on reporting a lost or stolen credit card, ATM card or debit card, visit the Federal Trade Commission).

  • The Consumer Financial Protection Bureau (CFPB) encourages consumers to review their credit card cardholder agreement to understand the terms of their cards “grace period” and cash advance policies. To view a sample cardholder agreement visit the CFPB.

(Tip: The FTC encourages consumers to keep a record of credit card account numbers, expiration dates and each cards customer service number, to help report a lost card quickly. Be sure to store this information in a safe place separate from your cards).)

For a variety of financial resources, including how to develop a monthly budget and set financial goals, visit Michigan State University Extension. In addition, Michigan State University offers money management and homeownership classes. For more information about classes offered in your area visit MI Money Health


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