As you are shopping around for a credit card, you’ll notice the APR or annual percentage rate. These rates vary widely, generally from 16% to more than 25%. How do you know if you are getting the best possible APR for your credit card?
What is APR?
ARP is the amount of interest charged on credit card purchases and cash withdrawals. The quick version is that the APR is based on the prime rate or the lending rate that is offered to borrowers with the best credit scores, generally over 690. We’ve covered how credit card interest works in great detail in a previous article. For more information on how APR works, read our article about how credit card interest works.
APR is tied to the best credit rating. If you have a less than stellar credit score, you probably will not get that amazing rate featured in the advertisements. The current average credit card interest rate on purchases is 16.97%. Occasionally you will be offered an introductory 0% on balance transfers or purchases. These can be great if you can pay off the balance within the time limit. Read the fine print to understand what the interest after the introductory rate ends.
Cards with more bells and whistles like travel miles or rewards will probably have a higher APR rates.
APR Varies Even on the Same Credit Card
If you read the fine print on your credit card bill, you’ll note that the APR varies based on what you’ve used the card for. APRs on purchases, balance transfers, and cash advances will all be different. Some cards will increase your APR if you are late with a payment.
Low APR Cards
If you want a low APR, you can probably expect no such perks like cash back rewards. You will save on interest charges if you carry a balance each month.
Check out credit unions for better APRs on credit cards. You may be able to cut the standard APR in half!
Higher APR Cards
These higher rate credit cards generally offer perks. However, you’ll find that carrying a balance on higher rate cards negates the value of the rewards.
Be careful about being sucked into applying for credit cards offered by your favorite merchant. You may save money on an initial purchase, but store cards generally come with high APRs. If you carry a balance, they may charge interest retroactively on those purchases you made at the beginning.
Getting a Better APR
If your credit score is too low to qualify you for the best rates, there are several steps available that you can take. The short version is to pay your cards on time, we’ll detail more actions in How to Raise Your Credit Score 100 Points Overnight.
Pacific Debt, Inc
If you are unable to make even the minimum payments on your credit cards and you have a balance over $10,000, there is help available for debt relief. You may benefit from credit counseling, debt consolidation, or debt settlement.
Pacific Debt Inc is one of the leading debt settlement companies in the US. We help you understand your options and whether or not debt settlement is your best option. If it is not, we will refer you to a trusted partner who may be more appropriate for your financial situation.
If you’d like more information on debt settlement or have more than $10,000 in credit card debt that you can’t repay, contact Pacific Debt, Inc. We may be able to help you become debt free in 2 to 4 years and we’ve settled over $300 million in debt for our customers since 2002.
Once you’ve completed our debt settlement program, your financial situation should start to improve. You’ll then be able to take the money you once had to pay towards your debt, and be able to use it for other purposes like saving, investing, retirement, etc.Pacific Debt, Inc is accredited with the American Fair Credit Council and is an A+ member of the Better Business Bureau. We rate very highly in Top Consumer Reviews, Top Ten Reviews, Consumers Advocate, Consumer Affairs, Trust Pilot, and US News and World Report.
Pacific Debt is currently providing debt relief coverage in the following states:
Alabama, Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Florida, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Maryland, Michigan, Minnesota, Missouri, Mississippi, Montana, North Carolina, Nebraska, New Mexico, New York, Oklahoma, Pennsylvania, South Dakota, Texas, Utah, Virginia, Wisconsin
* Other states can be connected to one of our trusted partners