What Is APR On Credit Card?

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If you’ve ever used a credit card to pay for something, you’ve probably seen the phrase “annual percentage rate” or APR on your statement. But what does APR mean? What is the impact on your finances when using credit cards? And how do you know if paying with cash is better than using a credit card to buy something? This guide will explain what an APR is and how it works.


Every credit card has an APR.

Every credit card has an APR, which is the interest rate you pay on your balance. You can think of it as a percentage of the amount you borrow, so if you have a $500 balance and an APR of 15%, your interest rate is $25 per month.

This isn’t necessarily bad news—you might be paying more in interest than other things in life that cost money, but at least it’s a certain rate that won’t fluctuate wildly over time.

APR stands for annual percentage rate.

APR stands for annual percentage rate. It’s the rate of interest you will pay on your credit card, and it’s often equal to your interest rate.

The APR on a credit card is the cost of using the credit card.

The APR on a credit card is the cost of using the credit card. In other words, it’s the annual percentage rate (APR). It’s also known as an interest rate and finance charge. The APR can be different based on factors such as whether or not you have good credit and what type of card you have (rewards or non-rewards).

If you’re wondering why your cash advance APR is so high compared to your regular purchase APR, it’s because of how much money you are borrowing: If a company gives out more loans at higher rates than smaller ones, then people who receive those loans will pay more in interest over time than those who received larger amounts at lower rates.

The good news is that some companies offer 0% introductory APRs for purchases or balance transfers, which means no interest for 12 months! There are other ways to save money on your credit card too—like avoiding late payments by setting up automatic payments from your checking account—but all in all it’s important to know how much this could cost over time before making any decisions about which cards are right for our needs and situation specifically.

The APR on your credit card can change overtime.

Your APR on credit cards can change over time. This is because your credit score, your balance, the issuer of the card and how you use it all affect your APR.

Here’s what we mean:

  • Credit score: If you have a good credit score, then you’re likely to get a lower interest rate than someone with poor credit. Low interest rates mean paying less in interest each month—which adds up if you make only minimum payments or carry a balance from month to month.
  • Balance utilization: A low balance utilization means that there are few accounts with balances on them compared to the total number of accounts that exist for that borrower (and thus a lower risk profile). This could help boost an applicant’s chances of getting approved for new credit lines or loans at better rates than someone who has high-risk factors associated with their accounts—like carrying balances on multiple cards or having one large account with an outstanding balance owed (as opposed to several smaller ones).

You might have a different APR depending on what you use your credit card for.

You might have a different APR depending on what you use your credit card for. You won’t get the same APR if you’re buying a $500 computer with your card as you would if you were only making small purchases each month, like buying groceries and gas.

The reason for this is that when lenders look at your credit history, they want to know how responsible of a borrower you’ve been in the past. If they think there’s any risk involved with lending money to someone based on their credit report, they’ll charge them more interest (a higher APR).

Your credit score affects how much of an APR you pay.

Your credit score affects how much of an APR you pay.

If your credit score is above 700, you’ll typically qualify for low-interest rates that are between 3% and 10%. If your score is below 650 and you have no other indicators of financial health like a savings account or car loan, chances are the rate will be higher—in some cases up to 25%.

The lower your credit score, the higher the APR. In other words: The better (or worse) your credit history and financial health, the more likely it is that lenders will charge a higher interest rate on loans and lines of credit like credit cards.

Paying with cash is always better than paying with your credit card.

In general, it’s always better to pay with cash than to use your credit card. Credit cards are not free; they charge interest on purchases and have other fees that add up quickly. If you have the money in your bank account already, then that’s a better option than using the credit card.

However, there are some instances where paying with your debit card is okay—and even recommended:

  • You’re buying something at an event or festival where there’s no cash available (i.e., a concert).
  • You need to pay for something over $50 but don’t have enough cash on hand at that moment (like paying for groceries).

Paying with cash is better than using your credit cards and paying interest.

The biggest advantage of cash is that it’s hard to spend more than you have. That’s because when you use cash, there is no interest rate associated with spending it. With credit cards, however, if you don’t pay off the balance every month and carry a balance over from month to month (i.e., pay interest on your purchases), then you’re essentially giving someone else that money for free in exchange for them charging an exorbitant amount of interest on top of it—which means the merchant wins and your finances suffer as a result.

Use credit cards only for purchases that will benefit from having lower monthly payments (such as putting an annual membership fee on a credit card instead of paying out-of-pocket).


We hope this post helped you better understand what APR is and how it affects your credit card. It’s important to know that paying with cash is always better than paying with your credit card and accruing interest.

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