Before credit cards were invented, shopping was very different from today. To buy anything you needed cash or a check. It´s a good thing credit cards were created. They totally changed the lives of many people. From the time they were introduced, people went crazy on shopping because they found it very convenient. But a lot of people just don’t seem to get the right ways to use it. They get so overwhelmed with the fact they don’t use cash.
Due to the excitement that credit cards bring, people don’t even bother choosing those with low APR, which stands for annual percentage rate. They are not aware that rates of interests of different credit card companies can make a huge difference to their payables.
Annual percentage rates usually range from 6 percent to 30 percent. If you have, for instance, a credit card with low APR, the lowest APR will definitely be applied, which is six percent or even lower. However, be reminded that APR’s are not simple to calculate, especially if you are not that familiar with the rates of interests.
In reality, what happens is that most credit card companies put forward low APR’s just so they can persuade people to sign up. There are even those that offer 0 interests, which is quite an attractive deal.
Low APR’s are more often than not offered to people who are still making a decision whether or not to avail of a credit card. They seem very convincing and once you have been allured to get one, the company will suddenly make changes and increase the APR.
When you have a credit card, it is also important for you to know the factors that will retain a low APR. You should also consider your two options, which are fixed interest rates and variable interest rates.
An APR that is fixed have an interest rate that does not change whatever the economic situation maybe. As for a variable APR, the interest rate varies depending on the Federal Reserve’s prime rate. Sometimes the rate of interest is low and sometimes it is high.
Most credit card companies offer low APR’s in the beginning, but they actually change in the long run. These companies profit through the APR, and they will surely not let it go that easily. No credit card company will last long if they stick with low APR credit cards.