The Highs Of The Low APR Credit Card
If you're in the market for a low APR credit card, which card do you choose? There are many types of cards and rates to choose from. You might want a fixed rate or it might be in your best interest to apply for a business credit card with a low rate. Whatever card you choose, a low APR credit card will save you money if you plan to carry a balance from month to month. A fixed rate has an annual percentage rate that does not fluctuate. It is not based on the U.S. prime rate or the LIBOR rate. However there is an exception.
It may increase if you default on your agreement by making late payments or going over your limit. Fixed rates are no longer common rates offered by credit card companies. You do occasionally find one, but not very often. The most popular fixed rate that I'm sure you're aware of is a 9.9% offered by a few companies on their basic credit cards. The annual percentage rate most credit card companies use is a variable rate. A variable rate fluctuates with the U.S. prime rate or LIBOR, depending on the credit card. To determine a variable rate, your credit card company will add a margin to the rate index. For example, U.S. prime rate plus 3.9% equals an APR of 12.15%. That would be based on a prime rate of 8.25%. Variable rates based on LIBOR are calculated in the same manner.
The U.S. prime rate and LIBOR both change from time to time, depending on the economy. This fluctuation is what causes the annual percentage rate on your credit card to change. Most credit card companies review these index rates monthly and apply them to your APR within a few days. As you can see, a variable rate may work in your favor. If the index rates go down, so does your annual percentage rate. Most low APR credit cards offer an introductory rate. An introductory rate allows you to make purchases for a specific number of months at a low annual percentage rate, if not 0%. These special offers can last anywhere from a month to a year or more.
If your interested in applying for a credit card be sure to check it out
Source: http://ezinearticles.com/
Added: June 27, 2008
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