It therefore shows how much your borrowing will cost over the period of a year, which is useful for planning your finances.
Credit card advertising will sometimes show afull representative APR的例子,which includes a purchase APR and an assumed credit limit. The purchase APR is the rate of interest that will be charged for purchases only.
The full representative APR can differ from the representative APR which includes additional fees such as a credit card annual fee. The assumed credit limit does not necessarily reflect the credit limit that you'll receive on the credit card – this is often based on your application details and credit score.
The advantage of a fixed APR is that you know how much you'll be paying without any surprise increases, but you may miss out if the base rate drops.
A variable APR is when the interest rate can change, either when the base rate changes or the lender changes their own rate.
If the base rate drops then the interest on your repayments can drop. However, if it rises your payments can also increase, giving less certainty about your monthly repayments.
Types of APR
- Penalty APR– The rate you could be charged if you trigger any penalty clauses in your credit agreement. Penalty clauses can include late payments or exceeding your credit limit.
- 介绍4月- 利率贷款人用作借款人申请的促销或激励。通常低或没有兴趣，当介绍期结束时，此速率可能会上升。
- 购买APR.– The interest rate of purchases made on your credit card. Some lenders may have a 0% APR on credit card purchases for a certain period, but this normally returns to the standard APR when the promotion period is over.
- Cash advance APR– The interest rate that some lenders and banks may apply to money you withdraw from the account, or that you spend using a written and cashed check. The cash advance APR can often be higher than the standard APR.
- 平衡转移APR.– Like a purchase APR, this is the interest rate of balance transfers made on your credit card. Some lenders may have a 0% APR on credit card transfers for a certain period, but this normally returns to the standard APR when the promotion period is over. There are a number of pros and cons to balance transfer cards.
Published 18 August 2020