Credit Cards and APRs

Summary: You probably see a lot of credit card offers on a daily basis whether it's on television, the internet, a magazine or in the mail. In the advertisement, you probably see or hear APR mentioned several times in the form of Introductory APR, Standard APR, Cash Advance APR, Balance Transfer APR and Default APR. The difference between these APRs might be confusing at first but they are pretty simple to understand.

You probably see a lot of credit card offers on a daily basis whether it's on television, the internet, a magazine or in the mail. In the advertisement, you probably see or hear APR mentioned several times in the form of Introductory APR, Standard APR, Cash Advance APR, Balance Transfer APR and Default APR. The differences between these APRs might be confusing at first but they are pretty simple to understand. Introductory APR refers to the initial interest rate you receive for purchases on the credit card when you first get it. This Introductory APR is usually really low (around 0%) and lasts between 6 and 12 months. Standard APR is the interest rate the credit card goes up to after the Introductory APR period is over. Cash Advance APR is the interest rate you receive for cash advances. Balance Transfer APR is the interest rate you receive for any credit card balance you transfer over to your new credit card. As a side note, if you have a high interest rate credit card and the new credit card company's Balance Transfer APR is lower than your present credit card's interest rate or if they offer the Introductory APR for balance transfers, transfer your balance to the new credit card if you can pay the balance off within the Introductory APR period. Default APR is the interest rate your card goes up to if you are late on payments or go over your credit limit.