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Credit card companies: the rewards, promos and services that make the difference
With so many credit card companies offering credit cards, the
consumer market for credit cards has become one tough cookie to
crack. To stay competitive, credit card companies offer various
extra services, rewards programs and promos that...
Credit Scores and Loan Applications
Keep Your Credit History Clean - Remove A Negative Credit Record From Your Credit Report It can make a difference of up to 18% in loan repayment costs. For example, on a 30-year, $150,000 fixed rate mortgage, a borrower with the best credit score,...
Poor Credit Mortgage Refinance - Refinancing Your Home After Your Credit Score Has Dropped
You can still refinance with bad credit, but you will need to
shop around. Each refinance application is looked at on an
individual basis. So even if you have bad credit, other factors
could qualify you for a low interest rate. However, if you...
Repair Credit by Observation
Repairing your credit takes observation on your part. We often
get two types of bills in the mail. Bills that are past due and
bills that are up to date. The fact is ignoring your bills is
only delaying and it does not help repair your credit. If...
Things to know about credit cards
A credit card is a card that allows you to borrow money for paying your purchases but bound to a certain limit. At the end off every month either you have to repay the whole amount or a minimum amount. A planned credit strategy will enable you to...
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How APR(Annual Percentage Rate) works with credit cards.
One of the most important factors when deciding which credit card to choose is a comparison of the APR, or Annual Percentage Rate. This is the cost of credit, the actual interest rate, determined on an annual basis and expressed as a yearly rate. By comparing the APR of credit cards, you can determine which card will cost you most, barring fees such as late payment charges, ATM fees, or cash advance charges. The APR offers a standardized way to compare yearly interest rates, whether the interest is computed on a daily, monthly, or yearly basis.
Under the federal Truth in Lending Act, credit card companies must provide you with information about the APR. If you understand the APR, you have a better chance of making your money work for you. When it comes to calculating the APR, you will have to do a little math, but it is well worth the effort to know exactly where you stand, financially speaking.
If you look at your credit card statement, you'll find that the finance charge, interest, is expressed both as a periodic rate and an annual percentage rate. If you divide the annual percentage rate by 12, you will come up with the monthly periodic rate. It is important to recognize that when you sign up for a credit card, you are signing a contract. If you understand how the interest on your account is calculated, you are much more likely to use your credit card wisely.
There are other things you need to know about the APR. Your card may, in fact, carry different APRs for
various transactions. For instance, regular purchases might be subject to an APR of 16 percent, while cash advances carry an APR of 19 percent. Also, if your card has a variable rate, it can be altered throughout the year. You should consider reading your credit card agreement and talking to a customer service representative to find out more information about your card's APR.
You should also consider selecting a card with an APR that is appropriate to your needs. For example, if you are able to pay your balance in full at the end of the month, select a card with a low annual fee. In such a situation, you can afford a card with a higher APR, since you will not be carrying a balance. However, if you will not be able to pay off your balance at the end of the month, select a card with a lower APR.
You can also use the APR to your own personal advantage. If you carry a balance on your credit card, pay more each month. That way, even if you face a high APR, you can minimize the interest you pay on the card. It's important to recognize that, if you only pay the minimum balance each month, you will have to pay more interest. It will also take you longer to pay off your debt.
About the Author
Ron Goodpaster is the Senior Staff writer for HTTP://www.cheapcreditoffers.com. He has been writing various articles on consumer credit for HTTP://www.cheapcreditoffers.com since May 2005.
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