How Does My Credit Card's Apr Affect My Financial Well Being?
A Credit Article Contributed by Augusta Wilson
What is a Credit Card Apr?
APR stands for 'Annual Percentage Rate,' a form of interest which accrues on your outstanding credit card balance. Credit card companies offer many different types of cards, and their desirability is based upon the type of APR that the card carries. For example, for consumers with excellent credit ratings, banks like Chase and Citibank, offer various types of credit cards, with low-rate APRs; the Chase Cashbuilder SM Platinum card offers a 0% introductory rate and no annual fee.
Other cards geared towards students offer generous rewards, like a pair of free movie tickets, with the completion of a successful application, or reward points, which can be applied towards the purchase of a new car.
What Does My Credit Card's Apr Mean to Me?
Your APR means a lot to both your credit rating and your pocketbook. Over the life of your credit card loan, a low APR could mean the difference of thousands of dollars. And, if you are like many Americans, you may tend to charge quite a bit of money each month to your card, promising yourself that you will pay off the balance, 'next month ' We all do it- but we seldom pay off the previous month's charges. However, if you continue to let the creep up and up, it could lead to financial disaster.
Simply, what happens is this: you accept a credit card offer, with a 0% introductory APR. You continue to charge little things, like CDs, gas for your car,and only make the minimum payment each month. This behavior is an accident waiting to happen. Remember, the interest on your balance will continue to build up your card balance, and then the finance charges will be added on top of that, leading to an even higher balance next month, and so it goes.
How Can I Get a Credit Card with a Low Apr?
There are many good credit card offers, many of which are available online. Most major banks, like Chase and Citibank, sponsor great low rate cards. The American Express Blue Card offers an interest free introductory period, with a low interest rate of 7% thereafter. There is no annual membership fee and a great rewards system; applicants generally need an excellent credit rating to qualify. The Discovery Titanium Card is another low interest rate credit card.
It also has an interest free introductory rate, a low 9.9% APR thereafter, and no annual fee. Additionally, excellent credit, applicants can receive a generous line of credit-up to $50,000. One other fun credit card is the The Toys 'R' Us Visa card. It's issued by Chase, and it's great for those with excellent credit, who want to take advantage of the reward program offered.
Card users can earn 5% back on all purchases made at any of the Toys 'R' Us stores, including Babies 'R' Us and Imaginarium.
Once you decide on which card best suits your needs, all you need to do is apply. Once you've been approved, you can then transfer the balance from your existing account, to the new card, saving you money in the long run.
