What Is Credit Card APR and How Does It Affect Your Payments?
Learn what credit card APR means, how interest charges work, and why comparing APRs can matter when choosing a credit card.
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What Is Credit Card APR and How Does It Affect Your Payments?
APR stands for annual percentage rate. For credit cards, it represents an annualized measure related to the cost of borrowing under the card's terms.
Why Does APR Matter?
If you carry a balance on a credit card, the applicable interest rate can significantly affect the cost of borrowing.
Different Types of APR
A credit card may have different APRs for purchases, balance transfers, cash advances, and certain other transactions.
Fixed vs. Variable APR
Some credit card APRs can change based on the terms of the account and market conditions. Review your card agreement to understand how your APR is determined.
How Can You Reduce Interest Costs?
Paying the statement balance in full by the applicable due date may help avoid interest on purchases when the card provides a grace period and you meet its requirements.
Compare More Than APR
When comparing credit cards, also consider annual fees, late fees, foreign transaction fees, rewards, introductory offers, and other account terms.
Final Thoughts
Understanding APR can help you better evaluate the cost of using a credit card and compare different credit products.
