Successfully Seeking Out The Low APR Credit Cards

Credit cards became very popular after the concept was introduced, because it fulfills much-felt needs: safety and convenience. It a lot easier and safer to transport and use than wads of cash of the same value. As the credit card become more widespread in usage, it naturally acquires more features as advertised by issuing companies as come-ons to would-be users. One distinct feature many claim is that they are low-APR credit cards.

What is APR?

The Annual Percentage Rate —APR— for low-APR credit cards is the total payable interest rate including all added costs. It is based on the card balance, interest rate, other fees and terms offered, and factored by assuming the card balance will be constant for a year, calculating the interest rate and all additional charges, then dividing the total by 12, and making the result a percentage of the balance. That is why even in low-APR credit cards, the APR itself fluctuates on by-month basis.

It is higher than simple interest rate because of the additional costs, and differs again from Effective Annual Rate depending on the terms of the loan or credit. The law mandates lenders to disclose APR values to borrowers and credit card applicants as a form of consumer protection, and also to give them some power of choice. Naturally, low-APR credit cards get preference if choices are open.

Benefits and Caveats of Low-APR Credit Cards

The simplest and greatest benefit is less total payments. If the APR is low, then the additional charges (beyond the cost of purchases) should likewise be low. Some low-APR credit cards issuing banks even offer 0% introductory APR up to 12 months from issue, although the average time is six months. However, most zero-intro APR cards subsequently charge higher APRs and transfer fees (charged when you transfer your card balance to a new card), so you may end up paying more after sometime. Low-APR credit cards are sometimes just camouflaged high-rate cards.

What to look for in Low-APR Credit Cards

You should choose low-APR credit cards that have no or low annual fees, low charges on online or phone use in transactions (some do charge you something), with insurance protection and those with honest, sincere consumer-oriented account people. Then read their terms and conditions and compare to find what suits you best. Low-APR credit cards differ on what they offer and it is important to look for the one that offers what you require.