Studying credit card rate is one of the keys to avoiding going into debt or falling into a financial pitfall. It should be one of the main priorities when scrutinizing various credit card companies. A company that offers very high credit card rates is never a good thing. A company that offers very low credit limits but with an equally low credit card rates is a far better option.
Credit card rate or APR is the rate of interest that is automatically added to your credit bills when you charge for goods, products or services. The usual “come-ons” of some credit companies specifies that their cards have high credit card rates. This obviously sounds enticing to many first-time credit card users, (since many credit card companies and suppliers still use this phrase to call on new patrons.) Many of us think that when credit card companies and suppliers say “high credit card rate,” they actually mean high deposits / savings interest rates.
Unfortunately, many of us fall for this kind of gimmick. We often do not realize it until too late (about a hundred dollars too late) that these credit rates eventually come out of our pockets, instead of it going in. In the long run, we, the card holders are actually paying for more than what we had bargained for.
Credit card suppliers can even charge you payment for the interests alone, especially if you cannot make full payments on time. So although you are actually paying a large amount of money to credit card collectors, your initial “debt” lies untouched - that is, until the suppliers demand payment for that debt as well.
There are many types of Credit Card Rate:
- The Introductory APR is the initial interest rate given to new or first time card holders
- After a year of introductory APR, Standard APR then follows
- Cash Advance APR is a safeguard against over withdrawing from the bank using a person's cash advance check
- Balance Transfer APR has perhaps the broadest scope of all APR's. If you have a passé credit card and decide to use a new one, you can transfer your accumulated APR to your new card - for a specific fee, of course.
- Default APR is a set of governing rules for the delinquent credit card debtors. It basically says how much will the interest rates on the card will go up when and if there is a delay in payment; or if you over withdraw money from your account.
