Explaining Credit Card Low Annual Rate (APR)

Credit cards have become a way of life for people all over the world. In fact, studies have shown that there are nearly 1.2 billion credit and debit cards are in use in North America alone, and the number of credit card users is on the rise every year. If you are planning to apply for a credit card, here are few tips to help you make an informed decision:

APR is the interest rate applicable to payments that are spread across a period of time. For example, if you buy a product for $1200 using your credit card, and choose to pay off the amount over a period of twelve months, you will end up more than just $100 a month.

The credit card company will charge you interest for making the payments as EMIs (Equated Monthly Instalments). The interest rate is calculated and projected annually (even if you plan to pay of the loan in 6 months). Before accepting a credit card, make sure you read the paperwork involved and understand the APR. Look for a credit card that is charging low interest rates, the average credit card interest rate is around 18%.