Low Apr Credit Cards
Many credit card companies use the term low APR to promote
their credit card offers. But how do you know if the card you
are applying for is really a low APR credit
card? To determine whether this is accurate or not, you're
going to have to look at the fine print of these claims.
Of course there are a lot of reputable and honest credit card
offers available as well. We recommend www.easy-approval-cr
edit-cards.com as an excellent source for dependable credit
card offers.
Here is some basic interest rate information to help you
determine if those "low APR rate credit cards" are really "high
interest rate credit rip-offs."
Keep in mind that interest rates are variable. Credit card
rates are set by adding a spread, or margin, to a base rate.
Your base rate is often a widely used index rate, which is
almost always a rate that changes periodically, without warning
and for no reason.
The spread that is added to calculate your rate depends on your
credit history. If you pay your bills consistently and on time,
the spread may be as few as 2 or 3 percentage points. If your
credit history reveals that you make late payments, or have too
much debt, the spread may be 5 or 6 percentage points or more.
The advertised rate on a credit card is often the card's simple
interest rate. The effective interest rate, however, is your
true cost of borrowing and includes annual fees you pay to use
the card. The compounded interest rate is a better barometer of
your effective interest rate. For example, if your card has a
rate of 12%, your monthly rate would be 1%. Because credit card
interest is compounded monthly, the effective annual interest
rate on a 12% simple-rate card is 12.68%. By doing a little
research, you could save yourself a lot of money in interest in
the long run.
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