Holicent
VIP Contributor
Credit card APR (Annual Percentage Rate) is the interest rate charged on the outstanding balance of a credit card. There are different types of APRs that credit card companies use. Here are the most common types:
Purchase APR: This is the interest rate charged on purchases made with the credit card. It is the most common type of APR and typically ranges from around 12% to 25%, depending on the card and the creditworthiness of the borrower.
Balance transfer APR: This is the interest rate charged on balances transferred from other credit cards. Balance transfer APRs can be lower than purchase APRs, often ranging from 0% to 5% for an introductory period of 6 to 18 months.
Cash advance APR: This is the interest rate charged on cash advances taken with the credit card. Cash advance APRs are usually higher than purchase APRs, often ranging from 25% to 30%.
Penalty APR: This is the interest rate charged when you fail to make a payment on time or exceed your credit limit. Penalty APRs are often much higher than purchase or balance transfer APRs, sometimes reaching as high as 29.99%.
It's important to understand the different types of APRs when choosing a credit card or using your current card. Knowing how your APRs work can help you avoid unnecessary fees and interest charges and make the most of any introductory offers. Be sure to read the terms and conditions of your credit card carefully and keep track of your payment due dates to avoid penalty APRs.
Purchase APR: This is the interest rate charged on purchases made with the credit card. It is the most common type of APR and typically ranges from around 12% to 25%, depending on the card and the creditworthiness of the borrower.
Balance transfer APR: This is the interest rate charged on balances transferred from other credit cards. Balance transfer APRs can be lower than purchase APRs, often ranging from 0% to 5% for an introductory period of 6 to 18 months.
Cash advance APR: This is the interest rate charged on cash advances taken with the credit card. Cash advance APRs are usually higher than purchase APRs, often ranging from 25% to 30%.
Penalty APR: This is the interest rate charged when you fail to make a payment on time or exceed your credit limit. Penalty APRs are often much higher than purchase or balance transfer APRs, sometimes reaching as high as 29.99%.
It's important to understand the different types of APRs when choosing a credit card or using your current card. Knowing how your APRs work can help you avoid unnecessary fees and interest charges and make the most of any introductory offers. Be sure to read the terms and conditions of your credit card carefully and keep track of your payment due dates to avoid penalty APRs.
