How and how often your credit card calculates your interest makes a big difference. Know what you are getting before you sign up.

• Average Daily Balance This is the most common calculation method. Each morning in the billing period, your balance is credited with any payments or refunds. Under some plans, any new purchases are also added. At the end of the billing cycle, daily balances are added and divided by the number of days in the billing period to get the "average daily balance."
  
  
• Two-Cycle Balance The average daily balance is calculated from two billing cycles rather than one, and finance charges are higher. The grace period for customers who carry a balance is wiped out. If the bill is not paid in full at the first billing, interest becomes retroactive back to the purchase date
• Adjusted Balance This is an advantageous method for cardholders. Payments or credits received during the current billing period are subtracted from the balance at the end of the previous billing period. Purchases made during the billing period aren't included. This method gives you until the end of the billing cycle to pay and avoid the interest charges.

Many credit cards solicit new customers by offering low introductory (or Teaser Rates) The credit card company will not remind you that the introductory rate period has ended, and you may be charged a significant additional fee to transfer your balances from your other credit cards.

Reducing Your Interest Rate
It is possible to qualify for a lower interest rate on your credit cards, the bank won't automatically inform you of this. Call the customer service line to ask if you qualify for a lower rate. If you have been paying at least the minimum balance due on your bills every month, your credit with the bank might qualify for a reduction.