When it comes to covering expenses, you likely swipe, chip or tap a lot more often than you count out dollar bills or write checks — and you’re not alone. A Gallup poll found that 71 percent of Americans have at least one credit card in their wallets and 16 percent have more than five credit cards.

If you’re applying for your first credit card, don’t be lured by promises of points and zero-interest balance transfers without reading the fine print.

Wondering how to choose a credit card that suits your needs? Here are the most important credit card terms to consider when signing up for your first (or a new) one:


Annual Percentage Rate (APR) 

What it means: Think of the APR as the interest rate on a loan. All credit card balances not paid off during the payment period will be subject to APR. The higher the unpaid balances, the higher the APR fees. The annual percentage rate varies between cards (and can change over time if the Federal Reserve raises prime rates or special low-rate offers expire). If you carry a balance on your credit card or routinely fail to pay off the amount due within the grace period outlined in the terms and conditions, the APR should be one of the most important considerations in choosing a new credit card.

Annual Fee 

What it means: Some cards have no annual fees but those with rewards such as cash back or air miles often charge cardholders. The fee will be billed to your card once per year — and interest will accrue if the balance is not paid in full. Before signing up for a card with an annual fee, determine whether the rewards outweigh the costs.

Extra Fees and Penalties

What it means: In addition to APR and annual fees, some card issuers charge fees for foreign transactions and cash advances, or levy penalties for late payments or exceeding your credit limit. Comb through the terms and conditions to understand all of the fees associated with the credit card you’re considering.

Introductory Rate

What it means: To entice new cardholders to sign up, credit card companies often offer low or zero-interest rates or zero-interest balance transfers. As the name implies, these rates are “introductory” and will go up over time. Read the fine print to understand how long the rate lasts and what the interest rate will be once the introductory rate expires.

Credit Limit

What it means: The credit limit refers to the amount you can borrow on the card. The credit card issuer will use your credit history, including the amount of credit currently available to you on other cards, total debt and payment history, to determine how much credit to extend.

Rewards Terms

What it means: Rewards programs differ from one credit card to another. You might get one point for every dollar spent with “multipliers” for charging items in certain categories, such as double points on groceries or triple points on gas. When evaluating cards, think about where you use your card most often and choose the rewards that make the most sense for your spending habits — but be sure to consider the other terms and conditions, too.

 Learn more: What Boomers Can Learn from Millennials about Managing Money

Reading the fine print to understand how the various terms and conditions will affect your finances is an essential part of being a smart consumer and choosing the right credit card. Looking for more budgeting tips? Talk to your Farm Bureau agent, who will have tips and tricks to help you develop and maintain a budget.