Why APR is so important when purchasing a new credit card
Credit cards charge an interest rate which is known as the Annual Percentage Rate (Credit Card APR). This takes into account when the interest rate is charged and any additional costs and fees that are related. Borrowing money is often more expensive on a card which offers a lower interest rate due to a number of hidden charges which typically aren’t reflected in the standard interest rate.
Customers with good credit card ratings generally have much wider options open to them and can apply for cards which have lower interest rates. However, if you have a poor credit rating then you could consider the Vanquis Credit Card. Anyone can apply for this card, on the condition that they have not applied for a Vanquis card within the last 6 months, are able to verify their home address, are not bankrupt and are registered to vote.
Generally speaking, APR is an effective way to compare the costs of different credit cards. However, it is important to be aware of how your card is going to calculate the interest when you borrow. One of the methods is adjusted balance, which is when new purchasing fees are included when your balance is taken from a previous statement, taking into account all payments which are subtracted. Another method is the average daily balance, which is the most common method of calculation used by card companies. Your balance is tracked on a daily basis; charges are added and payments are deducted when they take place. Your previous balance is also takes into consideration the amount of money you owed at the end of the last billing period. This is generally not the best calculation, as it allows finance firms to charge interest even after a debit balance has been paid off.