10 Amazing Tips For Credit Cards Apr

Introduction

Applying for a credit card can sometimes seem like a daunting task, especially considering the industry related terms used by credit card issuers. Before you make a decision on the type of credit card you want, is always advisable to consider the terminologies used to compute the interest rate, such as the credit cards apr.

Step 1

The interest rate on a credit card is an annualized percentage figure, charged by a lender to borrower for money lent out. It is used to calculate the payments due on a monthly basis. These monthly payments will include the principal repayment as a part of the interest payments. Credit cards apr on the other hand takes into consideration the total cost of the credit card, expressed as an annual rate.

Step 2

The cost of credit cards apr will be inclusive of the interest charged on the loan, plus the fees and charges that are levied by the card issuer for using for the card. These fees and charges will include the loan processing and document preparation fees, the application fees, attorney and legal fees, mortgage insurance charges, and any applicable taxes.

Step 3

There is an alternative to the typical credit cards apr offered by lenders, known as a 0% APR credit card. As its name would suggest, this type of credit card will not charge you any interest, fees or charges for using the credit card. However, these types of offers are usually available for a limited time only, after which the APR will usually revert to a normal higher rate. 0% APR credit cards are best suited for individuals with high credit cards apr debt, who can transfer their balance to this type of credit card and take advantage of the grace period.

Step 4

Low interest rate credit cards apr is also viable option, for those individuals who you would like to maintain a manageable level of credit from month to month and would like to make use of the card for a long period of time.

Step 5

Another term used by credit card issuers is the Effective Annual Rate (EAR). EAR is a compounded interest rate applied on a monthly or quarter basis (as per the credit card agreement), while the APR is a simple interest rate charged on annual basis.

Tips

Credit cards apr can be expressed in more than one way on your credit history. These are some of the ways credit card companies express Apr for different types of transactions:

• Purchase APR: this APR is charged on purchases made to the credit card.

• Cash advance APR: this type of specialized APR is charged for cash withdrawals made though an ATM or a bank. This rate charge on a cash advance APR is usually higher than that charged on a purchase APR.

• Balance transfer APR: this APR refers to the interest charged for transferring a balance from one credit card to another.

• Penalty APR: this is the finance charge users will accrue if they fail to make their repayments on time.

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