Credit card statements are issued monthly and you will have the choice of paying the bill in full or paying part only. The minimum amount due and the date by which it should reach the credit card company will be shown on the statement. If you don't pay the total amount in full by the due date you will be charged interest on the outstanding balance. The method of calculating interest will normally be shown on the back of your credit card statement. The method will differ between card issuers.

The rule of thumb is the lower the annual percentage rate (APR), the less your borrowing will cost. When you borrow money (on a loan, mortgage or credit card), this rate should always be quoted. It's the percentage rate which your loan will cost you each year, including all charges. The amount you might be charged will vary from nothing to more than 20% so it's important you shop around for the best deal.

Some (but not all) credit and charge cards levy an annual charge. The amount will differ from bank to bank and on the type of card issued. "Gold" cards are available for customers with a high income, although these will often attract a high annual fee. However, gold cards usually include a range of extras such as free card registration, insurance and preferential overdraft and loan rates.

Ask your card issuer for a list of additional fees for non-standard services such as replacement statements and copy transaction vouchers. There may also be a charge if your payment cheque "bounces" or if you exceed your limit. A list of these charges often appears on the back of your credit card statement.

Remember that if you use your credit card to withdraw cash from a cash machine, the rate of interest charged will be greater than if you bought goods in a shop. This is called a "cash advance" and the rate for this should be shown on your monthly statement.