IN THE BEGINNING...: In 1951, Diners Club issued the first credit card to 200 customers who could use it at 27 restaurants in New York. These days, companies can hike up the interest you owe on your balance without limits. To put it in perspective, a $4,000 balance with a 25% interest rate could tack on an additional $1,000 to your credit card bill in one year.
APR: All credit cards involve an APR, or annual percentage rating. This is the percent of interest on any balance you owe a credit card company (and accounts for how these companies make a profit off your spending!). Your rate may be raised or lowered depending on whether your payments are received on time. When your rate goes up, it's called a "delinquency rate."
Credit cards are different from charge cards like American Express, which require you to pay your balance in full each month.
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