The rate at which amounts owed to a bank on a credit card or loan account appreciate in value over time, increasing one's debt. In other words, this percentage of your average balance over the course of the month or year is tacked onto what you owe. When it comes to credit cards, the APR, or interest rate, is only relevant when you don't pay for the total amount of your purchases in a respective month.
For example, if your loan has a 10% APR, you will pay $10 annually for every hundred dollars of balance.
Usually, different types of credit card transactions have different APRs. One card might have a different APR for cash advances than for purchases or balance transfers. Also, some credit cards appeal to consumers with a low introductory APR; for example, 0% APR on balance transfers (or purchases) for six months.
The importance of a financial product's APR depends on the product and how you use it. More specifically, getting a low APR is obviously a priority when you're in the market for a loan. However, you should really only worry about a credit card's interest rate if you consistently fail to pay your bills on time, you're already in debt, or you're planning a big-ticket purchase. If you are, it would be wise to get the credit card offering 0% on new purchases, balance transfers, and new purchases, respectively.
The way you manage your credit card payments can also reflect upon your APR: miss a couple of payment deadlines and your APR might go into "default" and skyrocket by 10-20 percent!
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