Finding The Best Credit Card Rate

by : Peter Finch

The credit card rate is one of the main factors customers look for in shopping for a credit card. In fact, it is usually the first thing they will inquire about as well as the deciding factor if they go for a particular card or not. Credit card rate, which is popularly known as the APR or annual percentage rate is the most compared feature from the many companies that supply plastic money to customers.

Clients would usually compare the rates of one company against the others and chances are he/she would choose the card with the lowest APR. However, the APR should not be the only thing a potential card holder needs to consider before getting a credit card. With so many cards out in the market, customers get confused and they need to have a full understanding of the rates to make wise choice.

Credit card rate or APR refers to the rate of interest charged by the card supplier on the amount you owe them every month. When you filed your application for a credit card, you have signed to agree to the company's terms and conditions and this one is included. When you do not make full payments of your purchases for a month, the card company will charge you an interest for that.

Every month, your bank card supplier will send you a credit bill which specifies the full amount you owe them for the whole period. The bill also specifies the due date and the minimum payment you must pay. If you delay your payment or fail to pay up, you will incur a late fee and other charges which will be added to your account balance.

Card companies give you the option to pay for your purchases in full or just the minimum amount each month. If you pay the whole amount specified on your bill by the due date, no interest charges are added to your account. However, if you opt to pay only the minimum amount less than the full amount, you will be charged an interest for it based on the company's credit card rate.

You cannot contest the rates the company will charge you because you signed an agreement with them when you applied for a credit card, remember? The mechanics is if you do not make a full payment for purchases you made during a month by the time it is due, the interest will be added to your account balance for the next billing cycle.

When you make another partial payment for the following month, your new balance will be calculated and the corresponding interest will be added. This means that if you keep on making partial payments, your balance will keep on increasing and growing every month. This is something you need to watch out for because it may be too late before you realize you cannot pay up anymore.

This is why evaluating the credit card rate is very important when you choose your credit card. Remember this little plastic is powerful that could make you miserable if you do not practice discipline.