What are credit card rates?

card rates have always been an issue in applying for a card. These rates are what everyone should know before choosing a company from another. Shopping around for the best rates will give you the best deal.

For you to own a card, you should first know what are card rates? What is an APR? What are the different kinds of rates?

card rates are used to measure the interest of your card. It is used to know how much you would pay if you hold a balance on your account, if you have a cash advance or loan, and if you transferred a balance from other cards. The card rates are usually computed annually.

1) APR. The APR signifies the annual percentage rate of the interest. The APR is used by the bank to know how much would be charged on your bill for a yearly basis. There are two kinds of APRs:

* Fixed. This kind of APR is an interest rate which has been arranged by the bank. The fixed APR would not be changed unless the bank or the card owner would amend the contract of agreement. Majority of card accounts that has fixed rates does not change often.

* On-going. This kind of APR is a kind of interest rate that could change even after the signing of contracts and the grace period.

Note: Both the fixed and APR rates would depend on consistency of the bill payments, if you would request your APR to be changed either lower or higher and if certain government provisions was made regarding the annual rates of your card.

* Special APRs. These kinds of annual rates would depend on the contract you have signed. If your terms specify a penalty APR when you would not be able to pay for your bills, this kind of rates would apply.

2) Interest rate.

* Fixed. A fixed interest basically means that your rate cannot be changed unless the bank informs you that there have been some changes in the policies.

* Variable. A variable interest rate changes automatically whenever the basic rate of the bank increases or decreases.

Note: Both the fixed and the variable rates could be changed by the bank anytime. This means that any bank could alter the terms and conditions of your account for a fifteen-day notice.

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