Credit card rates have always been an issue in applying for a
credit card. These rates are what everyone should know before
choosing a credit company from another. Shopping around for the
best rates will give you the best deal.
For you to own a credit card, you should first know what are
credit card rates? What is an APR? What are the different kinds
of rates?
Credit card rates are used to measure the interest of your
credit card. It is used to know how much you would pay if you
hold a balance on your account, if you have a cash advance or
loan, and if you transferred a balance from other credit cards.
The credit card rates are usually computed annually.
1) APR. The APR signifies the annual percentage rate of the
interest. The APR is used by the bank to know how much would be
charged on your bill for a yearly basis. There are two kinds of
APRs:
* Fixed. This kind of APR is an interest rate which has been
arranged by the bank. The fixed APR would not be changed unless
the bank or the credit card owner would amend the contract of
agreement. Majority of credit card accounts that has fixed rates
does not change often. * On-going. This kind of APR is a kind of
interest rate that could change even after the signing of
contracts and the grace period.
Note: Both the fixed and APR rates would depend on consistency
of the bill payments, if you would request your APR to be
changed either lower or higher and if certain government
provisions was made regarding the annual rates of your credit
card.
* Special APRs. These kinds of annual rates would depend on the
contract you have signed. If your terms specify a penalty APR
when you would not be able to pay for your bills, this kind of
rates would apply.
2) Interest rate.
* Fixed. A fixed interest basically means that your rate cannot
be changed unless the bank informs you that there have been some
changes in the policies.
* Variable. A variable interest rate changes automatically
whenever the basic rate of the bank increases or decreases.
Note: Both the fixed and the variable rates could be changed by
the bank anytime. This means that any bank could alter the terms
and conditions of your credit account for a fifteen-day notice.
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