Glossary Adjusted balance A method used by some card issuers in which they subtract all payments made during the month, then add the finance charges.
Many credit cards come without an annual fee.
The interest rate reflecting the total yearly cost of the interest on a loan, expressed as a percentage rate. This is the method by which most credit cards calculate your payment due. An average daily balance is determined by adding each day's balance and then dividing that total by the number of days in a billing cycle. The average daily balance is then multiplied by a card's monthly periodic rate, which is calculated by dividing the annual percentage rate by 12. A card with an annual rate of 18 percent would have a monthly periodic rate of 1.5 percent.