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Have you ever looked at your credit card statement and wondered whether or not it was written in English, because the words meant absolutely nothing to you? Knowing the language of the industry can go a long way toward helping you understand your credit cards, which in turn may help you figure out ways to improve your personal finances.

Let's start by looking at the phrase credit card. Although we sometimes consider most of our plastic to be credit cards, there are different types of credit accounts. When you have a credit card, a bank loans you a specific amount of money, known as your credit limit, and you're allowed to make purchases with that line of credit. Of course, you're obligated to pay that back, which you can do when you get your monthly statement, or you can pay it back over time. When you choose to pay your bill in installments, the bank will charge you interest on the amount you owe.

This type of credit is known as revolving credit because the line of credit is open-ended. As you pay off the loan, you're allowed to borrow that money again in order to make other purchases.

As the Federal Reserve Bank of San Francisco explains in its "Credit and Charge Cards" pamphlet, there's another type of credit card known as a charge card. With a charge card, you have no set credit limit, nor do you get charged any interest. That’s because you have to pay off the balance in full every month.

These two cards are both different than a retail credit card, which is a credit card you can use at a particular store, such as a department store.

For revolving credit cards, companies charge any number of different interest rates, so it's good to know how they differ. The Federal Reserve explains that the primary interest rate you should know is your Annual Percentage Rate, or APR. This is the percentage rate of interest you'll be charged on remaining balances in a given year. This breaks down into a periodic rate, which is the interest you're charged per billing cycle. The periodic rate is a small portion of the APR. An APR can also be fixed-rate, meaning that during the time specified in your credit card agreement it will not change, or it can be variable, which means the rate can increase or decrease. A variable APR can change for a variety of reasons, including whether or not the U.S. Prime Rate, the American banking system's short-term interest rate, goes up or down.

Of course, you may notice that your credit card statement lists all sorts of interest rates based on the type of transaction you're making. The Federal Reserve explains that a purchase APR is the amount of interest applied on carried-over balances for items you buy.

An introductory APR is an interest rate offered for a specified length of time when you open an account. Federal law states that credit card companies must offer an introductory rate for at least six months, and they need to clearly state what the APR will be when the introductory period is over.

An introductory APR is different from a balance transfer rate, which is a special interest rate that credit card companies may offer you in hopes that you'll transfer your other card balances to their card. The offer will state how long the promotional interest rate is good for, and it will also include information about any balance transfer fees that are involved in the balance transfer process. These fees can be either a flat rate or a percentage of the amount you transfer.

Finally, credit card companies may also charge different interest rates or a flat fee for cash advances, a service that allows you to withdraw money from the balance on your credit limit.

Being aware of the different types of credit cards and their interest rates can help you understand what type of card is best for you and how to manage the different types of transactions you put on that card.