The All-important Plan
Now we come to core of the credit-card selection process -- which plan to choose. The costs and terms of your credit-card plan can make a difference in how much you pay for the privilege of borrowing (which is what you're doing when you use a credit card).

In the disclosure form from the credit-card issuer (usually a small, fine-print brochure), look closely at the credit terms we discussed earlier. Don't forget about specifics like late charges (usually $15 to $30) and over-the-limit fees (around $20 to $25). Consider these factors along with how you pay your bills each month.

For example, if you always pay your monthly bill in full, the best type of card is one that has no annual fee and offers a grace period for paying your bill before finance charges kick in. If you dont always pay off your balance each month (and seven out of 10 American cardholders fall into this category), be sure to look at the periodic rate that will be used to calculate the finance charge.

One of the major factors to consider in a credit-card plan is whether is has a variable or fixed interest rate. The next section discusses the details of this distinction.