What is a Low APR for a Credit Card?
A low APR is a great benefit for a credit card, but what exactly is a low APR? In this post, we’ll explore what a low APR is and how it can save you money.
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What is a Low APR for a Credit Card?
APR is short for Annual Percentage Rate and refers to the amount of interest you’ll pay on your balance if you don’t pay it off in full each month.
For example, let’s say you have a credit card with a $1,000 balance and an APR of 18%. If you only pay the minimum payment each month, it will take you longer to pay off your balance and you’ll end up paying more in interest.
In contrast, a low APR credit card means that you’ll save money on interest and can pay off your balance quicker. A low APR credit card is typically defined as any card with an APR below 13%.
There are a few different types of low APR credit cards available, including 0% intro APR cards, cards with ongoing low APRs, and rewards cards with introductory 0% APRs on balance transfers or purchases.
If you carry a balance on your credit card from month to month, it’s important to find a card with a low APR to save money on interest. Use our credit card comparison tool to compare different low APR credit cards and find the best fit for you.
How to Find a Low APR Credit Card
The Annual Percentage Rate (APR) is the cost of borrowing money on your credit card. It’s expressed as a yearly rate, but it’s actually applied to your balance monthly. Your card issuer sets your APR based on your creditworthiness, and it can change over time.
When you’re looking for a new credit card, it’s important to compare APRs so you can find the card with the lowest rate. That way, you’ll save money on interest and fees.
Here are a few things to keep in mind when you’re looking for a low APR credit card:
-The APR is just one factor to consider when you’re comparing credit cards. You should also look at other factors like the annual fee, rewards, and perks.
-A 0% APR introductory offer might sound great, but make sure you know how long the intro period lasts and what the APR will be after that.
-Some cards have different APRs for different types of purchases. For example, they might have a lower APR for balance transfers than they do for cash advances.
-If you carry a balance on your card from month to month, you’ll pay interest on that balance. The higher your APR, the more interest you’ll pay.
Finding a low APR credit card doesn’t have to be difficult if you know what you’re looking for. Just remember to compare all of the features of each card before you make your decision.
How to Use a Low APR Credit Card
A low APR credit card is a card that offers a lower than average interest rate on purchases and balance transfers. If you carry a balance on your credit card, a low APR can save you money on interest charges. If you frequently make large purchases on your credit card, a low APR can help you finance those purchases at a lower cost.
Most low APR credit cards have an introductory APR offer, which is an introductory interest rate that is lower than the standard APR. The introductory APR typically applies to purchases and balance transfers made within the first few months of opening the account. After the introductory period, the APR will revert back to the standard rate.
Some low APR credit cards also offer rewards or cash back on purchases, which can further offset the costs of financing large purchases. If you are considering a low APR credit card, be sure to compare offers from different issuers to find the card that best meets your needs.
Low APR Credit Card Benefits
Assuming you carry a balance and pay interest, a lower APR can save you money on your credit card debt. The best low APR credit cards will offer 0% intro APRs on purchases and balance transfers for up to 18 months, and some even longer. After the intro period expires, a low ongoing APR of around 14% or less is ideal.
Additionally, look for a credit card with no annual fee. Many of the best low interest credit cards are also Rewards cards, so you can earn points, miles or cash back as you spend. Just make sure your rewards rate is greater than the interest rate you’re paying on your debt; otherwise, it negates the benefit of having a low APR in the first place.