Credit Card APR Types and Options

There is recently a common question often asked by new users of credit cards APR, what is APR?

APR is standing for Annual Percentage Rate which is stating the rate at which you will pay in interest if you miss a payment, carry over a balance, take out a cash advance, or if you transfer one credit balance to another card. Credit card APR is the interest rate as a yearly rate.

Low Credit Card APR

There are many types of credit card APR. One credit may have several different APR’s. Here are some APR types of credit card:

a. Introductory APR – This type of APR means that a different rate will be applied after an introduced expires, usually 6 months to 1 year.

b. Multiple APRs – Some credit cards come with several APRs, one for purchases, one for balance transfers, and another one for cash advances. APRs for cash advances and balance transfers are higher than those for purchases. (for example, 13% for purchases, 18% for balance transfers and 19% for cash advances).

c. Penalty APR – Another type credit card APR is penalty APR. It may get higher if you miss a payment or more. For example, your card agreement may contain a message like this, “If your payment is received more than 14 days late more than one time in six months the penalty rate will be applied to your account.”

d. Delayed APR – This type of APR offers a different rate that will be applied in the future, after having your account for some time. For example, a card company may be advertising that there is zero interest until May of next year. Beware of the higher credit card APR that will be applied at that time. Sometimes it can be a major increase.

e. Tiered Credit Card APR – In this type of APR interest rates are applied to the multiple different levels of the remaining balance you have (for example you may have 14% on balances of $1-$500 and 18% on balances above $500).

We have other guide may you interested in reading : accept card credit