Credit Card APR.

A credit cards APR refers to the Annual Percentage Rate of interest which applies on that account. Currently many cards offer in initial no-interest period on either purchases, transfer of balances, or on both of these. A card with this initial 0% period can be used to make “free money” or to save paying any interest on existing borrowing as shall be detailed later in this article.

Cash advances often have different rules from other types of use. Sometimes a higher interest rate is charged, and this rate can be charged from the day the advance is obtained rather than from the billing date as is usual with purchases. It is also sometimes the case that repayments get applied to all other categories of expenditure on the card before they are applied at all to any cash advances.

0% interest for an initial period can be used to avoid having to pay an interest at all on existing borrowing if the 0% applies to balance transfers. This is done by transferring the existing borrowing onto the new card. This is a big advantage as repayments can be applied to decreasing the borrowing itself rather than doing little more than paying off the interest each month.

Another use of 0% APR cards is to make money by transferring the available funds to a high-interest bank account, so that the interest becomes profit when the card is repaid before it starts charging any interest. This method can even be applied to forms of profit making other than interest-paying bank accounts, such as business ventures, although this obviously carries significantly more risk and should be done only with extreme caution. It is rumored that the first batch of computer hardware for Google was bought using credit cards, and movies such as Clerks have also been financed in this way.

A credit cards APR is one of the significant factors to compare when choosing between different cards. However other factors such as fees and rewards should also be taken into consideration. Rewards such as air miles or cash back can be of great benefit.

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