Credit Card APR Facts.
A credit cards APR refers to the Annual Percentage Rate of interest which applies on that account. Currently many cards offer in initial no-interest period on either purchases, transfer of balances, or on both of these. A card with this initial 0% period can be used to make “free money” or to save paying any interest on existing borrowing as shall be detailed later in this article.
For cash advances credit card companies sometimes charge interest on the entire outstanding balance from the date they are obtained if the total balance is not paid in full. A further complication is that cash advances are often charged from the day they are obtained rather than the billing date, and often at a different rate of interest from purchases. Also repayments are often applied to all other transactions before they are applied to cash advances.
One can save paying interest on existing borrowing by transferring the amount onto a new account which has an initial no interest period for balance transfers. This can be a big advantage as by just continuing to make the same monthly repayments the borrowing can be paid down rather than just the interest paid off 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 significant factors to compare when choosing between different cards. However other factors such as fees and rewards should also be taken into consideration. Rewards such as air miles or cash back can be of great benefit.
Want to find out more about Credit Cards, then visit Thomas Goldman’s article directory, http://www.money-articles.net which contains hundreds of money and finance related articles.
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