When shopping for a credit card, it is of import to understand the annual percentage rate (APR) to happen the best deal for your situation. If you pay off your measure every month, a no fee and moderate APR program may be best. However, if you take out cash advances, you will desire a low APR on that feature.
Each credit card have respective different APRs. At the minimum they will have got a rate for purchases, cash advances, and transfers. Typically, cash advances will carry a higher rate than for purchases or transfers. Transfers usually carry low rates. Sometimes you can even happen an APR of 0% for an introductory period.
To lure you to open up an account, credit card companies offer introductory and delayed APRs. An introductory rate endures for a certain period, usually six calendar months to a year. Delayed APRs charge no interest until a certain month.
Some cards also offer tiered rates, which maintains rates low for those that carry a small balance. For example, a card might offer 15% on balances between $1 - $1000 and 18% on balances over $1000.
Credit card companies also have got punishment APRs. These apply when a payment is late, as outlined by the cards terms.
Fixed Versus Variable APRs
A fixed rate APR doesnt change. Usually these types of cards have got an annual fee with them. But they usually offer lower rates with some security, making them attractive to those who carry large balances. It is of import to retrieve that even fixed rates can change, but the credit card company have to give you notice.
A variable rate APR flexes with the index they are tied to, typically the premier or T-bill rate. Variable rate APRs are not the same as an introductory or delayed APR.
Picking The Right Card
Research all the APRs when you are looking for a good credit card. Know your credit habits, and pick the card with the rates that volition give you the best deal.
You can even unfastened multiple accounts, using them for different credit purposes. For example, you can utilize one card for cash advances but another for purchases.