Credit cards are considered necessities nowadays. In the United States and other developed countries, almost all people own one. Credit cards facilitate cashless transactions. That is why most consumers find them very convenient.
Through the years, more and more people have been signing up their own credit cards that they use to make purchases or make cash advances. Thus, the number of credit card companies is also on the rise.
But the major setback of owning credit cards comes when the credit card bill gets in the way. Usually, consumers are having problems with their credit card bills, claiming the statements are either overstated or inaccurate.
But knowledgeable credit card owners know that such problems would not result when the credit card user is well-oriented about the interest rates, penalties and charges imposed on transactions, cash advances and late payments.
If you are aiming to find the best and most suitable credit card for you, then you must first settle to find out which credit card would charge the least. Of course, the charges depend your purchases. But there are charges incurred from late payments, interests and special fees.
This is where the concept of the annual percentage rate (APR) comes in. APR is the term or factor that you must initially consider before filing a credit card application. This is because the APR directly would pose impacts to the amount of credit card bills you must pay.
The APR is the annualized rate of interest that is imposed to credit card users for having used the card to purchase items. The APR bears not just the interest rate charges, but all the other fees that comes with the card.
Thus, if you are imposed with late payment penalties and other special charges, those will be added to the APR on your bills. It is this reason that APRs in different credit cards vary. Take note that specific uses and purchases using credit cards may also sometimes incur different APRs.
Finding low APR credit cards
Experts advise that prior to the formal application to own a credit card, you must find the one that offers the lowest APR. There are many credit card products from different credit card firms and banks nowadays, so it would not be a hard task finding one.
Before getting a credit card, it is also advisable that you do a little research and make a comparison shop so you could easily compare APRs and pick out those that offer the lowest APRs to consumers. Take note that sometimes, cards tend to mislead consumers by offering low APRs, but there are understated additional charges.
Here are several strategies on how you could secure a much needed credit card that bears low APR.
o Check credit card issuers’ brochures and terms and conditions for membership. The APRs should be stated in such documents. You could easily tell the APR on a card and compare it with those applied by competing credit cards.
o Do not be misled by low APRs. Take note of the reminders that usually should come in with those states APRs. For example, a credit card may state if the APR is fixed or is a variable. If the APR is fixed, that means you could expect the sign up APR to remain for sometime. If the credit card issuer should raise that rate, you would be notified in advance.
Variable APRs are sometimes making up for lower rates. Why?That is because these rates are changing from time to time, and are usually dependent and tied to other interest rates, like the market overnight borrowing rates or the Treasury bill rates. Thus, when the market interest rate is dropping, the APR for variable credit cards are also dropping. At least, you will get to directly benefit from good interest rates in the market.
o Check the corresponding APRs for cash advance and installment purchases. These transactions are usually carrying different APR. Remember that the APR initially stated in the contract is the APR for usual transactions—light item purchases that ought to be paid within a month after the purchase. For heavy purchases that are intended to be paid in installment for months, a different APR automatically applies.
Overall, the APR is the factor that you must initially check prior to opening a credit card account. It is only normal that APRs for cash advances and installment purchases are higher than the normal purchase APR. Select the credit card that you think offers the reasonable APR for you so you would not argue with yourself when you start paying for your credit card bills.