by Joseph Kenny | 10/15/08

For the past several decades consumers have treated credit cards as frivolous play things. There was really no reason to treat plastic any differently; after all the credit card companies advertised their product as quick and easy money. Consumers became accustomed to instant gratification for their long hard work and freely justified purchases by saying; "I earned it".

With the credit crunch worsening, prices rising, and lines of credit becoming harder and harder to achieve consumers are only now sitting up and taking notice of what the terms on their cards and card agreements mean. Sure, that fine print will be different for everyone but there are some common terms and phrases that will be the same for everyone.

Listed below are some common terms that are found on most credit card applications and agreements.

Annual Percentage Rate - Or the APR is an important number that credit card companies are obligated by law to disclose to consumers. The APR is how much interest consumers will pay yearly. This number includes fees and other amounts that it took to acquire the credit. This is an important number and should not be overlooked by consumers.

Cash Advance Fee - You may not be too concerned about this fee as you search for a credit card but you will wish you had when you get slapped with the fee. Basically this is the fee you will incur when you acquire cash by using your credit card. The fee can either be a flat amount or percentage based. Make sure you know your fee before you head to the bank.

Cardholder Agreement - In accordance with the Federal Reserve, credit card companies issue the Cardholder Agreement. This statement is rather important and should be read over carefully. Cardholders will find the APR, their rights when it comes to disputes and other pertinent information on the Cardholder Agreement. Be aware, however, that the Cardholder Agreement is subject to change with written notice by the credit card company.

Finance Charge - Yet another charge dealing with the use of the credit card. As you search for credit cards make sure to take special care to notice all of the fees and charges.

Minimum Payment - This is a term that every credit card holder should know though practicing it may not always be prudent. The minimum payment is the amount required in order to avoid defaulting. The amount of the minimum payment will vary depending on whether the credit card company believes the holder to be high risk.

Pre-approved - Commonly regarded as junk mail a pre-approved credit card is really just a way of grabbing a consumer's attention in an effort to entice them into signing with that credit company.

There are dozens of other terms and phrases that the lender will be using so it is important to familiarize yourself with those. You never want to sign anything that you do not understand and this is especially true with a credit card since a foolish mistake can result in ruined credit and economic devastation.