Comparing Credit Card Interest Rates

If you’ve been in the market for a new credit card but don’t
want to pay more than you have to in interest rates, you might
find yourself wondering exactly how you can sort through all of
the promotional rates and other numbers that credit card
companies throw at you to determine which card actually has the
best rate
By taking the time to read carefully through the information
provided to you by the credit card company either in promotional
materials on or their website, however, you can find all of the
information that you want with relative ease It’s simply a
matter of knowing where to look, and what you’re looking for
Defining the Annual Percentage Rate The key to knowing how much
you’re paying in interest lies in understanding the annual
percentage rate, or APR The APR is the interest that is charged
on a credit card’s balance each year, and is subject to change
depending upon nationally-set interest rates and the
cardholder’s credit rating If you want to compare credit cards
based upon the interest that they charge, then you should
compare them based upon the APR of each card
Though the promotional advertising of many credit cards may only
display the promotional rate that is being offered in a
prominent position, the APR of the card is required to be
disclosed along with additional information concerning billing
structures, additional fees, and how these rates and fees are
calculated and charged
Where to Find the APR
In order to find the APR among all of the promotional
information that generally accompanies credit card flyers,
mailings, and websites, it’s important to know where to look If
you’re evaluating credit cards online, you should be able to
find a link that will take you to a separate page that contains
financial disclosure information and a chart that lists the APR
along with other fees and charges that might accompany your
card Should you be looking at a mailing sent by the card
company, there should be a separate page (or possibly the back
of a page) that contains the same information and chart
Concerning Promotional Rates
Don’t be fooled by the promotional rates that some cards offer,
but don’t ignore the promotional rate either Most promotional
rates only last for a few months, generally either three or six,
but that means that there are three or six months during which
you’re only paying a very small interest rate This can be
especially useful if you’re transferring balances from other
cards or using the new card to pay off older debts It’s
important to make sure that the rate which the card will revert
to after the promotion is something that you are willing to pay,
however, or you might end up with a much higher rate than you
were looking for
Making Your Comparisons
When comparing credit card interest rates, you should compare
the APR of each card that you’re considering Look for any
processing or activation fees that may be charged, and avoid
them if possible; if not, factor them into your considerations
You’re looking for the card that has the lowest APR and that has
lower fees than the other cards or if possible that has no fees
at all Don’t ignore promotional rates, but don’t rely on them
either if you can find a card with promotional rates that
also has a lower APR than some of your other options then great
If you can’t, don’t get stuck with a high interest rate just to
start off lower
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