What is an APR?

Your APR, or annual percentage rate, is the yearly interest rate you will pay if you carry a balance on your credit card. This also applies if you transfer your balance from another card or take out a cash advance. One credit card may have a few different APRs. There may be one percentage rate for purchases, a different rate for balance transfers, and another for cash advances. The annual percentage rates for balance transfers and cash advances are often higher than the APR for purchases. Your APR can change over time. If you have a "fixed rate" APR, it will change less frequently, and the credit card company must notify you before it increases. If you have a "variable rate" credit card, the APR will change from time to time, usually depending on the prime rate or the Treasury Bill rate. Also, many credit card offers advertise an introductory APR, or they may even offer no interest whatsoever for the first few months. Keep in mind that this introductory APR will generally go up after the introductory rate expires. Those consumers with excellent credit can typically qualify for the lowest APR.

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