Revolving credit Most credit cards offer revolving credit, meaning you can carry a balance from month to month. You will be required to make only a small minimum payment each month. A credit card is basically a form of borrowing. As with any other loan, the privilege of borrowing does not come free. Companies charge interest on the amount you borrow.
Cards come with either variable or fixed rates.
Although a fixed rate is usually a better idea, it is really a false attraction. Companies can change their terms at any time as long as they give customers 15 days notice. This is a yearly rate, expressed as a percentage, that is your cost of credit. Companies must reveal this rate on card agreements and your monthly account statements. You will also see a periodic rate, which is the rate applied to your monthly balance.