Now that you know that your APR means nothing unless you carry a balance, you can focus on a credit card's other costs and benefits when you look at the options. Our credit card tool can help you compare offers by evaluating factors such as annual fees, reward rates and more. If you pay in full every month: APR doesn't matter. Nerdy tip: Credit card issuers aren't required by law to offer a grace period for those who pay in full, but all good issuers do.
Some issuers that specialize in credit cards for bad credit don't offer a grace period. It's best to avoid these issuers' products.
If you have bad credit, see NerdWallet's best credit cards for bad credit for better options. If you don't pay in full every month: APR matters a lot. Two things to keep in mind:. If you need to carry a balance. If you don't need to carry a balance. On a similar note Dive even deeper in Credit Cards. And you can often view your APR after logging into your account online or via your bank's mobile app.
There's also the option to live chat or call a customer service representative if you're struggling to find the number on your bill.
It's important to avoid APR charges so you don't risk falling into debt. Here are two ways to avoid interest charges.
If you still find yourself carrying a balance month to month and incurring high interest charges, consider opening a low interest credit card. Skip Navigation. Follow Select. Our top picks of timely offers from our partners More details. SoFi Personal Loans. LightStream Personal Loans. We may receive a commission from affiliate partner links. To see how a change in the Base Rate or to your balance could affect your monthly repayments, check out the Barclaycard Interest Calculator.
But depending on the type of card you have, there may be other interest charges and APRs to consider: Introductory APR - This is for a special introductory rate that may be offered to customers when they first apply for a credit card. Balance transfer APR - this is the annual interest rate charged when you move a balance from your existing card to this new one. But beware that rates will jump once that period is over.
So we strongly recommend repaying the balance transfer before the introductory rate expires. Penalty APR - this may be applied to your credit card if you regularly spend beyond your credit limit or make a late payment.
Check your eligibility before applying Finding out your personal APR is a bit like shaking a Magic 8-ball. What's next? Learn more about credit. What should I use my credit card for? How do credit cards work. How is your credit score calculated? How to improve credit. If you do carry a balance on your credit card, however, you will owe interest. Bankrate estimates the current average credit card interest rate at above 16 percent. Interest charges can quickly add up and only get larger the longer you carry a balance.
Here are some scenarios using a range of APRs, a minimum monthly payment of 3 percent of the balance and assuming no additional charges are made on the card:. You can also see how much money you can save by adding more to your payment each month. There are several types of APR, however, that you should be aware of.
A fixed APR rarely changes, except in the case of a late payment or the expiration of an introductory offer. The benefit of a fixed rate is that your rate is locked in for a period of time. It makes planning for your payments easier because you know the rate will generally stay consistent. Fixed rate credit cards are becoming increasingly harder to find. More often than not, your credit card will have a variable APR that covers a certain range, such as A variable APR changes according to the prime rate , a benchmark that lenders use to determine interest rates on credit cards as well as other credit accounts, such as loans and mortgages.
While a variable rate may not offer the predictability of a fixed rate, it offers the possibility of paying less. Learn more : How to lower credit card interest rates. A good metric to consider when looking at APRs is the average rate, which is currently sitting above 16 percent. How your credit card APR compares to the average depends on factors, including your credit score and what type of credit card you have.
If you have a lower credit score, your APR is likely to be higher. With a higher credit score, your APR is likely to be lower. By improving your credit , you increase your chances of scoring a lower interest rate. Your APR is an important consideration when it comes to a credit card. If you find yourself needing to carry a credit card balance, however, understanding your APR will make budgeting for your monthly credit card payments much easier.
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