What You Need to
Know About a Low APR Credit Card
If a credit card is used properly, it can
be a powerful financial tool. However, not everybody can
afford all the expensive rates of most credit card
issuer’s offer. A low APR credit card helps if you plan
to maintain a balance on your account and not to pay the
full amount monthly. However, what does APR stands for in
a low APR credit card?
APR stands for “Annual Percentage Rate”.
It is the cost of credit figured as a yearly interest
rate. The APR rate can be used to compare different
credit and loan offers. It reduces the confusion of
multiple types of rates figured on different
amounts.
Normally, the APR on credit cards is
calculated each month based on the current amount owed on
the card. The monthly interest is calculated as if the
current card balance would remain the same for an entire
year. The interest of the balance over a year (APR) is
calculated and divided by 12 to give the monthly
interest. Always get an APR rate before signing any
credit card agreement.
The bottom line is this. The lower the APR
credit card rate, the better the deal. So, when comparing
credit cards, shop around for the lowest possible APR
rate you can get.
Why
choose a Low APR credit card?
If you’re in a tight financial spot, a low
APR credit card is a good choice. Because the APR rate
determines your balance over a longer period, it is the
most important attribute of a credit card.
The amount of interest you pay on your
credit card depends on the APR. The lower your credit
card balance, the less interest you will have to pay. Low
Credit Card APR’s can be fixed or variable. Be sure you
know what you’re getting before you sign up for the
credit card.
There are many low APR credit card offers
online. If you’re considering a new credit card, that
would be a good place to start looking. The types of
offers are varied. Each company uses multiple factors in
determining what rate to offer as their best
deal.
When looking at credit cards, you need to
look at the following information. First, is the APR rate
fixed or varied. If you can get a good fixed rate, your
payments will remain steady. If you get a variable rate,
your payments could go up. Look for a fixed rate whenever
possible.
Be sure to check out any charges that do
not appear in the APR rate. For example, some companies
charge optional payment protection fess or an annual fee.
Look for a card that does not charge an annual fee. The
annual fee will only increase what you pay.
If you are currently looking for a low APR
credit card, look for an initial offer that could save
hundreds in interest with a low interest credit card and
low cost processing.
Almost all low APR credit card offers 0%
APR for the first months (12 to 18 months) on purchases,
cash advances, and balance transfers. Through these, low
APR credit card can accumulate rebates or rewards towards
items you purchase. They also offer $0 liability on
unauthorized purchases, and no annual fees.
Other low APR credit cards have special
discounts on items you purchase. For example, you may get
a 5% rebate on gas and up to 1% on everything else. Still
others offer good deals if you have high balances on
other credit cards. They will allow you to transfer these
balances and not pay interest for several months. As long
as you work at paying off the balance, it is a good
deal.
A credit card can be useful and
convenient, if used properly. You can also build a good
credit history by paying your payments on time each
month. Before you apply for a low APR credit card, be
sure you check out all the information. Also, make sure
you can make your payments on each month on
time.
About the Author and
Publisher
Larry Andrew founded and operated his own
educational consulting corporation for over twenty years. He
has extensive experience in teaching, business and finance.
Low APR
Credit Card
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