Best interest rate credit card
The first step in choosing the best interest rate credit card is to take a look at the Annual Percentage Rate
What are the APRs?
The annual percentage rate–APR–is the way of stating the interest rate you will pay if you carry over a balance, take out a cash advance, or transfer a balance from another card. The APR states the interest rate as a yearly rate and this is where you look for best interest rate credit card
Multiple APRs
A single credit card may have several APR’s. One APR for purchases, another for cash advances, and yet another for balance transfers. The APRs for cash advances and balance transfers often are higher than the APR for purchases (for example, 14% for purchases, 18% for cash advances, and 19% for balance transfers).
Tiered APRs.
Different rates are applied to different levels of the outstanding balance (for example, 16% on balances of $1–$500 and 17% on balances above $500).
A penalty APR.
The APR may increase if you are late in making payments. For example, your card agreement may say, “If your payment arrives more than ten days late two times within a six-month period, the penalty rate will apply.”
An introductory APR.
A different rate will apply after the introductory rate expires.
A delayed APR.
A different rate will apply in the future. For example, a card may advertise that there is “no interest until next March.” Look for the APR that will be in effect after March.
If you carry over a part of your balance from month to month, even a small difference in the APR can make a big difference in how much you will pay over a year.
Fixed vs. variable APR. Which are the best interest rate credit card ?
Some credit cards are “fixed rate”–the APR doesn’t change, or at least doesn’t change often. Even the APR on a “fixed rate” credit card can change over time. However, the credit card company must tell you before increasing the fixed APR.
Other credit cards are “variable rate”–the APR changes from time to time. The rate is usually tied to another interest rate, such as the prime rate or the Treasury bill rate.
If the other rate changes, the rate on your card may change, too. Look for information on the credit card application and in the credit card agreement to see how often your card’s APR may change (the agreement is like a contract–it lists the terms and conditions for using your credit card). What seems like the best interest rate credit card at first may change after reading the agreement. If you sometimes carry over a balance from month to month, you may be more interested in a card that carries a lower interest rate (stated as an annual percentage rate, or APR).
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