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you owed at the end of the previous billing period. 
Payments, credits, or new purchases made during the current 
billing period are not taken into account. Some creditors 
also exclude unpaid finance charges in computing this 
balance. If you do not understand how the balance on your 
account is computed, ask the card issuer. (An explanation of 
how the balance was determined must appear on the billing 
statements the card issuer provides you and on applications 
and pre-approved solicitations the card issuer may send 
you.) 
The following are examples of how different methods of 
calculating finance charges affect the cost of credit: 

              Average Daily        Average Daily
                 Balance              Balance
             (including new       (excluding new
               purchases)           purchases)

Monthly rate     1 1/2%               1 1/2%

APR                18%                  18%

Previous
Balance           $400                 $400

New Purchases      $50                  $50
               on 18th day          on 18th day

Payments          $300                 $300
               on 15th day          on 15th day
          (new balance = $100) (new balance = $100)

Average
Daily Balance     $270*               $250**

Finance Charge    $4.05                $3.75
             (1 1/2% x $270)      (1 1/2% x $250)


* To figure average daily balance (including new 
purchases): 

($400 x 15 days) + ($100 x 3 days) + ($150 x 12 days) 
divided by 
30 days = $270

** To figure average daily balance (excluding new
purchases):

($400 x 15 days) + ($100 x 15 days) divided by
30 days = $250


            Adjusted Balance     Previous Balance

Monthly rate     1 1/2%               1 1/2%

APR                18%                  18%

Previous
Balance           $400                 $400

Payments          $300                 $300

Average
Daily Balance      N/A                  N/A

Finance Charge    $1.50                $6.00
             (1 1/2% x $100)      (1 1/2% x $400)

Costs and Features
Credit terms differ among card issuers, so shop around for 
the card that is best for you. Which one is best may depend 
on how you plan to use it. If you plan to pay bills in full 
each month, the size of the annual fee or other fees, and 
not the periodic and annual percentage rate, may be more 
important. If you expect to use credit cards to pay for 
purchases over time, the APR and the balance computation 
method are important terms to consider. In either case, keep 
in mind that your costs will be affected by whether or not 
there is a grace period. 
When shopping for a credit card, you probably will want to 
look at other factors besides costs -- such as whether the 
credit limit is high enough to meet your needs, how widely 
the card is accepted, and what services and features are 
available under the plan. You may be interested, for 
example, in 'affinity cards' -- all-purpose credit cards 
that are sponsored by professional organizations, college 
alumni associations, and some members of the travel 
industry. Frequently, an affinity card issuer donates a 
portion of the annual fees or transaction charges to the 
sponsoring organization, or allows you to qualify for free 
travel or other bonuses. 
Using a Credit Card
Federal law prohibits card issuers from sending you a credit 
card that you did not request. (The issuer may send you a 
renewal or substitute card without a request.) Card issuers 
are permitted to mail you an application or a solicitation 
for a credit card or to ask you by phone whether you want to 
receive a card -- and to send you one if you say yes. 
Credit Card Protections
Federal law protects consumers when they use credit cards. 
The protections include the following items. 
Prompt Credit for Payment
A card issuer must credit your account on the day the issuer 
receives your payment, unless the payment is not made 
according to the creditor's requirements or the delay in 
crediting to your account does not result in a charge. To 
avoid delays that could result in finance charges, follow 
the card issuer's instructions about where to send payments. 
Payments sent to other locations could delay getting credit 
for your payment for up to five days. If you lose your 
payment envelope, look on the billing statement for the 
address for payments or call the card issuer. 
Refunds of Credit Balances
When you return merchandise or pay more than you owe, you 
have the option of keeping the credit balance on your 
account or requesting a refund (if the amount exceeds 
$1.00). To obtain a refund, write the card issuer. The card 
issuer must send you the refund within seven business days 
of receiving your request. (Also, if a credit balance 
remains on your account for more than six months, the card 
issuer must make a good faith effort to refund the credit 
balance.) 
Errors on Your Bill
Federal law provides specific rules that the card issuer 
must follow for promptly correcting billing errors. The card 
issuer will give you a statement describing these rules when 
you open the credit card account and, after that, at least 
once a year. In fact, many card issuers print a summary of 
your rights on each bill they send you. You must notify the 
card issuer in writing at the address specified for billing 
errors when you find an error, and you must do so within 60 
days after the first bill containing the error was mailed to 
you. (For this reason, keep your credit card receipts and 
promptly compare them when your bills arrive.) In your 
notification letter, include your name, your account number, 
the amount of the suspected error, and the reason why you 
believe that the bill contains an error. The card issuer, in 
turn, must look into the problem and either correct the 
error or explain to you why the bill is correct. This must 
occur within two billing cycles and not later than 90 days 
after the issuer receives your billing error notice. During 
the period that the card issuer is investigating the error, 
you do not have to pay the amount in question. (For further 
information, write: 'Credit Billing Errors,' Public 
Reference, Federal Trade Commission, Washington, D.C. 
20580.) 
Unauthorized charges
Under federal law, if your credit card is used without your