Looking Beyond APR

The Annual Percentage Rate (APR) is one of the most important things to look or in a credit card. When you’re intending to keep a balance, most especially, a high-APR card can mean thousands more in interest over several years compared to a lower APR offer. However, APR should not be your only concern. Sometimes, other factors can play more importantly into how much value you can get out of your card.

For instance, if you’re familiar with your credit history and know that you will occasionally end up paying late, a card with a slightly higher APR but a considerably lower late fee can prove a better deal. If you regularly pay off your balance from month to month, on the other hand, the APR may not be so important as a $0 annual fee and rewards features.

When getting a new card with a low APR, always check whether it is an introductory rate or the actual finance rate of the card. Many cards offer very attractive low teaser rates to entice customers to apply but they typically last only between six months to a year. If it is an introductory rate, make sure to ask what the updated APR will be and whether any other part of the deal changes along with it.

One of the most best things with low APR cards is the ability to transfer existing balances from other cards and pay them off at the lower, more manageable rates. If you’re interested in doing this, make sure to check our three-part feature on balance transfer pitfalls so you can take advantage of this service without falling prey to common cardholder mistakes.