Before signing for that credit card, get to understand about the APR rate that the company is using to calculate interest, the Annual Percentage Rate could significantly affect your spending and clearing of the debt, since this is the rate of interest you are supposed to pay on that credit card.
Annual Percentage Rate denotes the interest you will pay for your credit card after one year. Credit card interest builds up very fast, any information and feature in your credit card should be taken seriously. Unpaid interest through APR is what may eventually damage your credit report.
Shopping around for different Annual Percentage Rate is more than encouraged on any person wishing to apply for a new credit card, visit banks, ask question, inquire any hidden charges because many banks are only interested in selling the product and not about your welfare parse, its business for them, and its should be also for you, don't think that you getting the credit for free, everything comes with a price.
Always read the credit card's fine print or credit card's disclosure statement, try as much as possible to get a credit card that has one Annual Percentage Rate for every feature, different APR variable may be expensive and could cause trouble in the future, some banks will even negotiate to lower Annual Percentage Rate, shop around to what best suites you at the most minimum cost available.
How is the APR calculated?
To calculate your APR, you need first to calculate your monthly rate and then multiply it by 12 to know what you will be charged annually. For Example.
An Annual Percentage Rate of 12% will work out as follows
12% divided by 12 equals 1%.
To calculate the monthly finance interest using a monthly periodic rate, multiply the Average Daily Balance x Monthly Periodic Rate = Monthly Finance Charge.
For example, if $100 is your account balance then: $100 x 1% = $1.00.
Some cards have a daily periodic rate. To get the daily periodic rate, you divide the APR by the number of days in the year (365).
For example, 12% divided by 365 days in the year equals .03%.
How can one make APR to work for you? There always tricks and loop to almost every thing and same applies to credit card industry, if you can not find a Annual Percentage Rate that suits you needs you can employ ways to reduce the interest you pay. You can achieve these by paying more than the minimal monthly payment each month, the longer it takes to reduce your credit the more interest you will be paying, so as the month passes your balance will incur more and more interest which will eventually lower your Annual Percentage Rate.
Remember credit card companies will not disclose to you any disadvantages of using their product, its upto you to do research get what suits you best, remember APR will multiply interest if only you have balances. Try as much as possible to clear monthly balances