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Credit Card APR Facts.

A credit cards APR means the Annual Percentage Rate of interest charged. IT is common now for cards to offer a zero-percent initial APR which can be on purchases, balance-transfers or sometimes both. This initial 0% period can either be used to avoid paying any interest on existing borrowing or can be used to make a profit.

Cash advances often attract a higher rate of interest and this interest is sometimes payable from the date they are obtained rather than the billing date. It is sometimes the case that repayments onto the card account are applied to all other transactions before they are applied at all to the cash advances.

0% interest for an initial period can be used to avoid having to pay an interest at all on existing borrowing if the 0% applies to balance transfers. This is done by transferring the existing borrowing onto the new card. This is a big advantage as repayments can be applied to decreasing the borrowing itself rather than doing little more than paying off the interest each month.

It is actually possible to make a genuine profit for free, from cards which have a 0% initial period on balance transfers. Simply put the available funds into an interest-bearing account such as a high-interest savings bank account, and collect the profit. This approach is occasionally applied to other forms of investment other than savings accounts, but these other investments usually carry higher risk. Successful examples of this include movies such as “Clerks”, as well as the initial batch of hardware used by the Google search engine business according to rumor.

A credit cards APR is one of the main factors in choosing a card, and can be a quick way of comparing a variety of card offers, but it’s not the only factor in choosing a card, as there can be various fees, and the exact details of the agreement can vary. Also, some cards offer particular rewards, such as air miles or other specific ways one can benefit from using the card.

Want to find out more about Credit Cards, then visit Thomas Goldman’s blog post on Credit Cards APR., plus lots of other related topics.

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