APR (Annual Percentage Rate) is a single percentage that represents the actual yearly cost of servicing some form of debt like credit card debt, an auto loan, mortgage, personal loans , salary loans and/or any other type of liability where its accruing interest is going to have an APR.
APR also suppose to encompass the cost of fees and the cost of other interests.
APR varies by the type of the loan or liability.
What is apr credit card?
The credit card APR is around 15-16% for a general use credit card like apr visa credit card and master card etc.
For retail store card, or those credit cards with a branding of a store (i.e. Lulu in Saudi Arabia) have a higher APR which is around around 20%.
Some credit card also have variable interests rates or variable APR rather thanFixed APR.
Fixed APR means that your interest rates stays the same overtime, while variable APR mean that they are tie to a prime rate or what is refer to as index.
There is a big possibility that when the index changes so does your credit cards interest rates.
What is the difference between interest rate and apr?
Interest rates and APR for credit cards account are only meaningful if your carrying debt on the card.
But if you are paying your full balance every month then APR become meaningless, because your not paying interest.
So what is a good apr for a credit card? Basically it is zero, and you achieve this by paying your full balance every month as mention above.
APR’s are set in almost all cases based on credit risks.
Credit risks is the risk of the lender doing business with you.
Its how the lenders subsidize the risks of doing business with you by making more money from the entire group of people with similar risks profiles
Watch the video below for more detailed explanation on What is APR?
Did you like ” What Is APR For Credit Card Means?”. We would greatly appreciate if you would share this on Facebook and Tweet it.
The post What Is APR For Credit Card Means? appeared first on Wealth Strategies.