How Knowing About Credit Cards APR Can Save You
There’s a popular hearsay about credit card companies covering up their ulterior motives by coating their products in irresistible chocolate and a 0 APR credit card falls right into this category. Thinking about this, it is without a doubt true. For most people who are familiar with the credit cards purchasing system would more or less have an idea about these extra little charges you will have to pay for when making use of their services.
One thing every credit card holder must know is the credit card APR or annual percentage rate.
These little add-ons in your monthly dues credit card bill are simply just broken down chunks of a whole year’s worth of extra payment to the credit card company.
Here’s a good way of looking at it.
It allows you to stretch the payment scheme from a few months to as much as several years. It’s more popularly conceptualized as the interest that your credit card bears.
Before availing of a credit card, you better check first the credit card APR for each credit card offered to you. Knowing the annual percentage rate will allow you to consider steps by which you can prevent paying excessively for the purchases you charged or will eventually charge to your credit card should you decide to stick to a particular one.
Note that credit card companies offer credit cards with varying annual percentage rates. Some credit card companies would have a set credit card APR of just 7 percent while others would even charge to as much as 30 percent.
Another thing to remember about credit card APR is that the rate can go both ways.
It can either go lower or higher depending on your credit history. You see, it is important to maintain a good credit history if ever you intend to keep your credit card APR low.
You can prevent your credit card’s annual percentage rate or interest from ballooning by keeping to the suggested timeframe or deadline of payments. In most cases, credit card companies will allow payments with no penalty up to 15 days from the start of each month.
Also, keeping a clean credit history may eventually merit you a new credit card with a considerably cheaper or lower credit card APR.
Going further into the topic, it is best to share as well the concept behind hidden charges or hidden credit card APR rates. Some credit card companies give “low introductory rates” to first time credit card holders or for newly issued credit cards.
After a certain duration of usually 90 days, the special rate will revert back to the standard credit card APR. Also, cash advances using your credit follow specialized APR so do check the fine print!
Knowing about how annual percentage rates or interests work will greatly save you from making hasty purchases or availing just about any credit card being offered to you. Don’t forget that the credit industry is one thick businessman trying to outsmart his clients with cunning measures.