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Seven Reliable Sources To Learn About Credit Card Apr | credit card apr

A credit card's APR tells you how much money you must pay overtime to borrow money at a certain interest rate. This can give many people pause, because the APR can be costly. However, once you've learned all about APR, it's easy to understand that this isn't always the case. For example, if you only use your credit card for small purchases, you don't spend nearly as much interest on those purchases as someone who splurges on everything. And, of course, the former person is more likely to file for bankruptcy.

The APR helps you keep track of your credit card balance by calculating how much interest you're currently paying monthly and then figuring the amount of interest you'll be paying if you continue to charge on that balance. For example, let's say you've been using your credit card for a while and are now nearing your minimum payment. Your minimum payment is usually around two percent of your credit card balance. In this case, you need to increase your minimum payment to at least ten percent of your balance in order to begin paying off your debt. In most cases, the easiest way to do this is to transfer your credit card balance onto a low-interest low-balance card, such as a balance transfer card from a partner company, or from an introductory offer.

How much interest you're paying on your credit cards can also be used to help determine which credit cards have the lowest APR. Credit card companies calculate their APRs differently. Some credit card companies base their APRs on your credit card balance, some on the average amount you owe, and some on the average length of time you've had your account active. In general, the longer your credit card account has been active, the higher your APR. However, there are other factors affecting APR, including the card's category and whether it is a secured or unsecured credit card, which determines both the APR and the interest rate.

One of the primary factors used by credit card companies when determining APR is your credit card balances. Credit card balances are always a concern, especially with high balances. If you carry a high balance on your credit card at any given time, your APR will be significantly higher than it would be for someone who only has a low balance. This is because the credit card APR is based on the level of risk, the credit card company perceives by calculating your credit card balances based on your past credit card history.

The second factor used to determine your credit-card APR is the Federal Reserve Board's interest rate index. Every six months, the fed funds rate is released with an inflation index that varies from month to month according to the Consumer Price Index. Because credit card companies base their interest rates and APRs on the fed funds rate, changes in the index can significantly affect interest rates and fees. For example, if the fed funds rate rises by one percent, your credit card APR will increase by one percent. Changes in the index may also cause changes in the purchase APR of your credit card.

Your credit card APR is also determined by your creditworthiness. Creditworthiness is an evaluation of your financial responsibility as well as your willingness to repay debts. Each year, you must submit an application to the credit card companies that evaluate your creditworthiness based on your credit history. The evaluation factors include your payment history, length of time you've held your accounts, the number of credit card accounts you currently have open, and the types of purchases you make each month. All of these factors are used to determine your creditworthiness and determine your interest rates.

The last major factor that is used to determine your APR is the credit accounts you possess. There are a variety of factors which determine your APR. The most common is the level of credit accounts you currently possess. If you currently have higher interest credit balances such as store credit cards with high balances or credit card accounts from other lenders, then typically your APR will be higher. Conversely, if you do not have any credit accounts, your APR will typically be lower.

Credit card APR typically varies between credit card providers, but you should be aware of the fees and charges which apply to you. Examine the fine print so that you will be fully informed of the APR you are being charged. Credit cards generally come with APR and incentives, however you will pay interest on any purchases you make while the APR is in effect, whether you use the rewards cards or not. The APR typically remains the same for standard APR accounts while rewards cards may have additional rates and fees associated with them.


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