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Understanding Credit Card APR

Aug 17, 2007
If you have a credit card or are looking to get one, it is important that you understand the ins and outs of card APR. Credit card APR is the biggest factor in determining how much you pay for your card, and so to get the best deal you need to know what it is and how it works. Here is some advice regarding the ins and out of credit APR.

What is APR?

APR stands for Annual Percentage Rate, and is a measure of the cost of the credit you borrow. The APR is the amount that you pay yearly in interest on the money that you borrow on your card.

How much is credit card APR?

Card APR can vary massively depending on your financial situation, the type of card you want and the deals on offer. Generally, credit card APR ranges from 10-18%. If you shop around then you will find the best deal for your needs.

How do I find out the APR?

Credit card APR is very easy to find out, and all lenders are required to tell you the APR of a card before you sign up for it. Also, credit cards are generally advertised by the cost of their APR.

Comparing APR

If you are trying to find the best card deal, then there are many places online where you can compare the various APR rates of cards from different lenders. Although there are other costs involved with credit cards, generally a lower APR is better.

O% APR deals

If you are looking for a credit card, then you might see 0% APR card deals advertised. Although many of these deals are not what they seem to be, there really are some great introductory offers to be had. Some cards do offer 3 or 6 months with 0% APR, meaning that you can use your card without paying any interest during this period. This gives you basically free credit, providing that you pay it back in this time.

Drawbacks of 0% APR

The drawbacks of these deals are that there are often hidden costs involved, such as high fees if you miss payments or go over your credit limit. Also, once the 0% period ends the credit card is generally has a higher APR rate than other cards. To use 0% APR cards to your advantage, you should look for one that has a fairly low rate after the initial period, or swap cards once the 0% period ends. If you invest a little time and effort you can skip from 0% APR to 0% APR on various cards. Of course, this can make you look financially unstable so you should be careful when swapping cards frequently. However, if you understand APR rates then you will be able to find a great card deal.
About the Author
Peter Kenny is a writer for creditcards-gb.co.uk Please visit us at 0% Credit Cards and Credit Cards
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