Quite A Few Facts To Assist People With Regards To Understanding Credit Card APRs

I’m sure that you know about credit card accounts. As a matter of fact, if you are like most Americans in the United States, chances are, you have a charge card account in your wallet or pocket book! With that said, it’s a surprise to me that many people simply don’t understand charge card account annual percentage rates. As a matter of fact, most consumers simply think that charge card accounts only have one interest rate. Well, this is not the case. Here is a list of the different credit card interest rates and the balances that they effect:

Credit Card Standard Interest Rates: Standard APRs are usually the only annual percentage rates that consumers know about. However, standard APRs only apply to balances that were accumulated through standard purchases. Standard purchases include grocery stores, gas stations and any other standard day to day activity. This interest rate is not charged to balances accrued through things like ATM transactions, balance transfers, ect…

Promotional Interest Rates: The promotional interest rate on credit card accounts was born as a way to attract new people to credit cards in such a competitive market. Promotional annual percentage rates are low short term interest rates usually 0% that will last from the date the charge card account is opened until the end of the promotional period. These interest rates generally last from 6 to 12 months however, if consumers look hard enough, they may find one that lasts a bit longer. These APRs may apply to entire balances or portions of balances depending on the promotions. It is important when people compare promotional APRs that they read this section of the terms and conditions.

Cash Advance Interest Rates: First off, I would like to say that I never advise people to use charge card accounts for cash transactions. Cash transactions include A.T.M. transactions, Western Union Money Transfers, or any other transaction where cash is transferred in one way or another. This is because balances accumulated through these types of transactions will be charged the cash advance APR. Aside from the default annual percentage rate, the cash advance interest rate is generally the highest interest rate on credit cards.

Balance Transfer Interest Rates: Another APR that many people aren’t usually aware of is the balance transfer APR. This APR only applies to balances that are accumulated through balance transfers. A balance transfer is when consumers use one charge card to pay off another.

Default Interest Rates: Finally, we have the default interest rate. Default APRs are the rates of interest that consumers never want to see. These APRs were designed as a form of punishment for people who default on their credit card accounts. Some examples of defaults are late payments, non payments and spending over the charge card spending limit.

I hope that this article has given many consumers more of an understanding of their charge card account annual percentage rates. Please come back to read more of my work!

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Author: StevenMartinez

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