What Is APR on a Credit Card?
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is APR?
How Does APR Work?
Typical Credit Card APR
Fixed APR vs Variable APR
What Is Fixed APR?
What Is Variable APR?
Different Types of APR
Purchase APR
Balance Transfer APR
Penalty APR
Cash Advance APR
Risks of High APR
What to Expect From High APR Cards
Advantages and Disadvantages of Low APR Cards
Pros of Low APR Cards
If you can’t pay off your balance in full each month, a low-rate credit card won’t lead you to rack up as much in interest. A low-rate card spares you the ritual of chasing zero-interest cards and other promotional offers that expire, leaving with whatever is the going rate.
Cons of Low APR Cards
Some low-rate credit cards charge fees if you transfer balances or use them abroad, which can add costs. A low-rate credit card may not offer rewards and perks like other cards. Even though the interest rate is low, it’s still adding to the cost of your purchase.
Tips to Avoid Paying Interest
The Takeaway
Frequently Asked Questions
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About the Author
Sheryl Nance-Nash is a freelance writer specializing in personal finance, business, and travel. Her work has appeared in Money Magazine, Newsday, The New York Times, Business Insider, BBC.com, AARP the Magazine, ABCNews.com, Forbes.com, among others.
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