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Most everybody experiences some form of financial difficulty throughout their lives. Credit cards, when used appropriately and responsibly, act as aides through tough times, provide financial protection against money card fraud, and safe ways to pay bills, among many other benefits.

Unfortunately, many who take on the responsibilities of a credit card do not fully understand their terms, conditions, and potential for unplayable obligations. This article will briefly explain basic terms used by credit card issuers, the benefits of using a credit card, and the best 10 credit cards of the June 2017 calendar month.

Calculating Credit Card Balance

Without understanding these basic credit-card-related financial metrics, you will not be able to evaluate the value of credit card offers.

For example, let’s consider your credit card to have $50 outstanding principal as of April 1st at 10% interest, compounded monthly. What is the dollar amount outstanding on the credit card as of April 1st and May 1st, respectively?

Principal is the balance outstanding on the credit card. Principal changes period after period, decreasing if the bill is paid; increasing if spending outweighs credit card payments. If you spend $25 on March 1st, the outstanding principal totals $25 after spending. When you spend more, in this case another $25, the balance totals $50.

Interest is the proportion of principal charged by the lender for the purchase of goods.

There are two types of interest, simple and compound, although this example uses only compound interest because all credit cards utilize compounded interest calculations. Compounded interest “piggybacks” off the prior period’s outstanding principal.

The first month’s interest, on April 1st, is $55. This is calculated by multiplying $50 times 10% interest, totaling $5. This $5 of interest is added back to the principal, tallying $55 for the month of april. On May 1st, multiply $55 times 10%, equaling $5.50. Add $5.50 to $55 and reach a total of $60.50. That’s ten dollars in just two months, even though you only spent $50 dollars. As such, it is vitally important to understand calculation of interest and how you can reduce your balance most effectively.

Important Credit Card Terminology

Annual percentage rate, often shortened to APR, is your credit card’s interest rate on a yearly basis. Interest on credit cards is usually calculated day by day, so to figure out daily interest charged on an APR of 22%, divide 22% by the number of days in a year. Seek out credit cards with fixed rate APRs, as their interest rates are highly unlikely to change unexpectedly. Credit cards without a variable rate may change interest without warning, often resulting in higher interest charges.

Grace periods are set numbers of days in which you are allowed to pay the bill without racking up interest charges and fees. A grace period of 28 days means the latest you can submit a minimum payment without earning interest on recently purchased goods is 28 days after the statement date. A commonly known benefit of credit cards is the ability to purchase something now and pay for it within the grace period: this results in absolutely zero interest!

June’s 10 Best Credit Cards

With your newfound understanding of popular credit card terminology and principal and interest calculations, determine which of these top credit card choices are best for you.

1) Chase Sapphire Reserve‘s top features include $300 in Annual Travel Credit credited to your account at each and every year’s anniversary of when you took out the card. Transfer points at a 1:1 ratio to many of the world’s top hotel loyalty rewards programs. This card is ideal for travelers, barring flight restrictions and blackouts with Chase’s Ultimate Rewards program. Unfortunately, the Chase Sapphire Reserve’s outstanding benefits does come with a hefty annual fee of $450. Unfortunately, again, this card touts a variable APR ranging from 16.74% to 23.74%.

2) The Citi Simplicity card is one of the nation’s top 0% APR credit cards – yes, that’s right: zero; count ’em: zero! This top credit car choice features absolutely no annual or late fees. Simplicity’s upsides are paired with balancing detriments, as 0% annual percentage rate only lasts for 21 consecutive months after opening. This card’s APR shifts to a value between 14.24% and 24.24%. Fees are also tallied on balance transfers after the initial four months, which are free.

3) Citi features another entry to this list of top 10 credit cards, the Citi Diamond Preferred Card. Congruent to the above-mentioned Simplicity, there is 0% APR for 21 months, however, the variable rate shifts to 1 percentage point less, between 13.24% and 23.24%. This Diamond Preferred Card boasts no annual fee, akin to its cousin, the Simplicity card.

4) Everyone likes cold hard cash, as made possible with the BankAmericard Cash Rewards card. Spend $500 in 3 months, earn $150 cash rewards online. Redeem 1% on everything bought, 2% when buying groceries, and 3% on gasoline. Make even more by transferring cash bonuses to a Bank of America bank account in the form of a 10% customer bonus.

5) Earn 1.5% cash back on every single thing you buy with the Chase Freedom Unlimited card. The first 15 months features a 0% APRon both purchases and balance transfers, after which a variable APR ranging from 15.74% to 24.49% and 5% are implemented, respectively. Chase Freedom Unlimited features a – wait for it – $0 annual fee. Another initial bonus is earning $150 after spending $500 in the first three months.

6) BankAmericard Travel Rewards features a $200 travel credit, or 20,000 points, from buying $1,000 in the first 3 months. Earn back 1.5 points per $1 purchased through this card’s lifetime. Most importantly, this credit card boasts zero dollar foreign transaction fees.

7) The Chase Sapphire Preferred Card boasts a strong points reward program. One such incentive in this program is an equivalent of $625 in travel credits, or 50,000 points, after spending $4,000 within the initial three months. Earn 1 point per $1 spent every transaction, and 2 points per dollar spent while traveling or eating. Obtain another 5,000 points upon adding an additional authorized user and that user purchases something in the first 3 months.

8) Discover is known for high levels of customer service, especially with the Discover It Cashback Match card. Total cash back earned at the end of the first year is doubled up to $400. Gain a 5% discount on everything you buy at each quarter’s selected type of store. Also, always net a 1% cash back on all purchases. Most importantly, Discover’s customer service is entirely in the United States.

9) American Express’ Business Gold Rewards Card can earn hundreds of thousands of points from a variety of sources. AmEx also offers complex yet simplified expense tracing tools for your business. The first year requires a $0 annual fee. There are also no foreign transaction fees.

10) Capital One Bank Platinum Visa is great for young adults with no credit history or those with negative histories. Gain back 1% cash back on most purchases while raising your credit score. Another plus of this card is checking for qualification does not harm credit score.