WISE UP TO THESE CREDIT TERMS

Minimum balance: The minimum amount a credit-card holder is required to repay in each billing period. He can pay more than the minimum amount due. However, if he pays less than the minimum amount, the credit-card issuer might impose a penalty.

Annual percentage rate (APR): The amount you pay in interest charges per year. Most credit-card issuers charge an APR of 3 to over 30 per cent, so read the fine print before signing up for a card.

Compound interest: Interest that is added to the principal amount, so the interest that has been added also earns interest. For instance, a person who has a $100 loan (the principal) with 1 per cent monthly interest has to pay $101 at the end of the first month. Failure to do so means he pays $102.10 at the end of the second month. The longer he delays payment, the more he will have to fork out.

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