What is APR Rates

One of the first questions you should ask, when you go shopping for a credit card is, what is the APR rate? That's because, if you fail to pay the full amount on time, it can affect how much you pay monthly. APR is the annual percentage rate on a credit card. This is the interest you will be paying per year. If you want to know, how much you will be paying per day, you need to take the APR and divide it by 365. Here is an example how APR works, let's say you have $ 100 balance on your account, and if your APR is 26%. If you pay the minimum on it, you will be paying $ 26 interest on it per year, and any late fees or any other penalties.

The APR on all credit card variants, this is due to several reasons, such as your credit card score, if you have a very good score, you will be getting the lowest APR. But if your score is poor or if you do not have any credit, most likely your APR will be higher. These rates can be anywhere from 7% to 26%. Each credit card has different APR, so make sure you read all the fine prints before you sign up. Credit card companies use either fixed interest or variable interest for rates. Fixed interest means the APR can change, but they will usually send you a notice, telling you when it will change. Variable interest is based on interest rates are doing plus 4%. The interest rates are measured by prime rates. You can search on line for current prime rates.

Source by Bijan Akhavan

Leave a Reply

Your email address will not be published. Required fields are marked *