Credit Card APR Explained

The APR of a credit card is a direct measure of the cost of using that credit card.

The APR value takes into consideration the credit card interest rate and any mandatory fees that card provider adds. For illustration purposes the APR rate calculation assumes that:

• £1,500 is spent on the credit card on the first day (if the credit card limit is lower then the limit figure is used).
• The card is not used again the full balance is paid over 12 months in equal monthly installments.
• The APR is a good way to compare the cost of various credit cards. Normally the lower the APR the less interest you will have to pay on your outstanding balance assuming you don't pay your whole balance off.

Credit cards are always advertised with a "Typical APR". This is the normal rate that you can expect from the card when any promotional or introductory rates are not in place. Some credit card providers advertise various APR rates that people may receive depending on the credit card providers assessment of the credit worthiness of the applicant. At least 66% of the approved applicants will be charged the "Typical APR" or less however a portion will be offered a higher APR.

The interest rate may vary over time and you should check your monthly statements as they will tell you what the current interest rate is for your card. Your monthly credit card statements will also tell you the end dates for any promotional or balance transfer periods.

The provider of your credit card is required to give you notice of any pending change in cost of your credit card. Ensure that you carefully consider the implications of any credit card rate or cost change.

Remember

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