Explainers, with their sources
Guides
How credit card rates, bank bonuses, CDs and the rest work, in plain words, with the rules and sources behind them.
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2, newest firstCDs
How CD early withdrawal penalties work
Withdrawing from a CD before it matures costs a penalty, usually months of interest, which can cut into your deposit early in the term.
Credit cards
How a variable credit card APR follows the prime rate
Most card APRs are the prime rate plus a fixed margin, so they move when the Fed moves rates, usually from the next billing cycle, with no notice.
Glossary
All 32 termsBanking and credit card terms in plain English, each with a worked example and the calculator that goes with it.
APRannual percentage rate
The yearly cost of borrowing as a percentage: on a credit card, the interest rate on balances you carry; on a loan, the interest rate plus certain fees.
APYannual percentage yield
The percentage a deposit earns in a year, counting compounding: the figure banks must quote for savings accounts, money market accounts and CDs.
Prime rate
The base interest rate banks use for many variable-rate loans and credit cards, set 3 percentage points above the top of the Federal Reserve's federal funds target range.
Variable APR
An interest rate that moves with an index, usually the prime rate: the card or loan adds a fixed margin to the index, so the APR rises and falls with it.
Grace period
The time between the end of a billing cycle and the payment due date, at least 21 days, during which new purchases charge no interest if you paid the last statement in full.
Credit utilization
The share of your credit card limits you are using, overall and on each card; lower is better for credit scores, and under 30% (ideally under 10%) is the usual guidance.
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