When applying for a newcredit card, most people will pay close attention to several different things.

It could be the signup bonus or the rewards they can earn.

This post originally appeared onCredit.com.

However, it can be confusing and you’re free to easily be left uninformed.

When Will Interest Be Charged?

A little-known perk of most credit cards is that they come with a grace period.

This is the period of time from when your credit card statement closes to its actual due date.

The number of days depends on the card issuer, but its typically at least 21 days.

How Do You Calculate Interest?

But do you know how that figure was derived?

To start, its important to understand some terminology.

We frequently see APR mentioned in credit card terms.

Even though this means annual percentage rate, interest is not calculated on an annual basis.

Its actually calculated on a daily basis, which is more commonly known as the periodic interest rate.

So lets assume your card has an APR of 16%.

That means your periodic interest rate would be 0.044% per day.

Then its payday and you are able to pay off $500 on the 16th.

Then you pay off another $500 on the 25th of the month.

What Can Affect Your Credit Card APR?

Most credit cards will state they use a variable APR.

This means that the rate can move up and down based on different factors.

Some of these factors are directly in your control, while others are controlled by outside influences.

Something that is in your control is your creditworthiness.

They also may look at your FICO score, among others.

Thehigher your scores, the lower your APR will be.

(Not sure where your finances stand?

You canview two of your credit scores for freeon Credit.com.)

However, another factor is something called the prime rate.

This is defined as the lowest rate of interest at which people may borrow commercially.

If the Fed raises rates, your APR might go up.

If the Fed lowers rates, you APR could go down.

With nearly 10 years of writing experience, his work has appeared in many of the industries top publications.

He holds a Bachelor of Arts degree in economics.

Image bySean MacEntee(Flickr).