What Is Credit Card APR?

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
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Veronika
 
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What Is Credit Card APR?

Postby Veronika » Fri Jan 28, 2011 8:21 am

*Hello
I would be thankful to you if you can explain me, what is credit card APR?
I tried to google it but I did not get the exact meaning, is it an Interest that has to be paid regardless to your account balance going under $0 or not ?
Which means, If I have for example a balance of $10 000 during 2011 and I made 2 transactions -100$ and -150$, Will I have still to pay that credit card APR ?

Some of my friends told me, the credit card's APR applies, only if you make purchases while you don't have enough of funds in your account to cover these transactions.

Please explain.

Veronika


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Mogul of Pineapples
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Postby Mogul of Pineapples » Mon Jan 31, 2011 1:32 am

What is APR? It stands for Annual Percentage Rate. It's the interest rate it costs to carry a balance for one year. The confusing part is that the actual APR you will pay to do that will be a fraction higher, because the interest will be compounded on a daily schedule when a balance is carried.

If you pay off your charges in full each month there is no interest charged. If you don't then there will be interest charged going back to the date of purchases on the next month's bill.

Does that make sense?
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naomibatac
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Postby naomibatac » Tue Nov 29, 2011 5:52 pm

Mogul of Pineapples wrote:What is APR? It stands for Annual Percentage Rate. It's the interest rate it costs to carry a balance for one year. The confusing part is that the actual APR you will pay to do that will be a fraction higher, because the interest will be compounded on a daily schedule when a balance is carried.

If you pay off your charges in full each month there is no interest charged. If you don't then there will be interest charged going back to the date of purchases on the next month's bill.

Does that make sense?


This means that when you pay your balance in full each month, the APR will not be applied so you don't pay any interest. Therefore, the best way to use credit cards is to always pay in full each month. But, emergencies come that affect your finances so it is still better to get credit cards with low APR just in case you will miss or delay a payment.
[size=60]I don't have any relationship to the credit cards or companies discussed here. I am solely a regular member of this forum with no direct financial rewards from this site. My opinions are solely mine.[/size]

A mom of 3 and currently living life, and working for credit card helpline, a company dedicated to helping people get out of credit card debt.



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