EVERYTHING YOU NEED TO KNOW ABOUT YOUR CREDIT CARD APR

2007-06-20 15:49:53

( Financial )



Credit card APRs refers to the rate of interest that will be paid once a balance is carried over, extracted a cash advance, or transferred balance from your other credit card computed on a yearly basis.

ONE CARD, MULTIPLE APR

Several Credit card aprs may be provided in your card:

APR for purchases, cash advances and balance transfers. In most cases, cash advances and balance transfers have a higher APR compared to purchases.

Tiered APRs. Computations of your credit card’s annual percentage rate are dependent on the levels reached by your card’s outstanding balance. Interest is different when the balance reaches a certain amount.

A penalty APR. In case your payment defaults, the annual percentage rate tends to become higher.

An introductory APR. Changes in the interest rate will be effected once the beginning rate expires.

A delayed APR. In certain cases, credit cards offer zero interest until a certain period of time. Beware of the APR that will be charged to your account as soon as the deadline is reached.

When a portion of your outstanding balance is carried over for each succeeding month, a slight difference in the APR will prove to be a big factor in the computation of your payments on an annual term.

DIFFERENCE BETWEEN FIXED AND VARIABLE APR

When your credit card offers a “fixed rate,” just like citi visa card, means that there is no change or slight change in the annual percentage rate. “Fixed rate” credit cards provide possibilities of changing over time. Be sure that your card company informs your credit card APR is changed.

On the other hand, “variable rates” credit cards offer changes in the APR as frequent as they can. The interest is packaged with other interest rates. A difference in the other rates may affect your credit card APR. Browse the application form in your credit card to find out the frequency of change in your APR. The terms and conditions of credit card use are very much similar when you sign a contract or bind yourself in an agreement.


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