You should always avoid carrying a balance on your credit card, but if you can’t pay your statement in full, the annual percentage rate (APR) matters. This determines how much interest you’ll pay on your balance.
Credit card APRs are currently among the highest we’ve seen, but having a good credit score will help in getting offered a lower interest rate, and some cards offer 0% introductory rates.
Cards offering introductory APR offers include the Blue Cash Preferred® Card from American Express and the Chase Freedom.
personal finance coverage.
According to NerdWallet, 47% of Americans carry a credit card balance month to month and pay interest on it. Obviously, paying off your card monthly is the preferred method, but if you’re going to purchase something with a card and carry a balance, your interest rate matters.
Say you paid $48 per month on a $1,000 credit card debt for two years at 15% APR. You’d pay $163 in interest charges. But take that same card and pay 25.99% APR, and it now costs $53 per month and $292 in interest.
Keep in mind that we’re focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It’s important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.
What’s up with high credit card interest rates?
There was a time, just a few short years ago, that having excellent credit meant your credit card interest rate was low. Some people even selected cards based not only on miles, rewards, and cash back, but also on the …read more
Source:: Business Insider