What is APR and how does it affect your credit card bill?
APR credit card bill

What is APR and how does it affect your credit card bill?

Pawan

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What is APR and how does it affect your credit card bill?

APR stands for Annual Percentage Rate. In simple terms, it’s the amount you’ll pay for borrowing money over a year. What does this mean? Let’s begin with how APR works:

When you first get your credit card, some companies give you a grace period with regard to APR. For instance, Zolve offers you 0% APR for the first fifteen months. This means if you don’t pay the entire credit card bill amount, you aren’t taxed on the balance you owe — for the first fifteen months. After fifteen months, you will be charged an interest on the balance you owe.

Is the APR tied to something?

APR is tied to a figure called the prime rate. This is essentially the lending rate that banks offer to customers with the best credit. That’s why when the prime rate increases, credit card interest rates increase too.

How is APR calculated?

APR ranges for credit cards depend on the type of credit card and your creditworthiness. This means the better your credit score, the lower the interest rate you pay. That’s why the lowest advertised APR isn’t always what you’ll get.

Zolve offers you 0% APR for the first 15 months and doesn't ask for a U.S. Credit Score or SSN.

After the fifteen month period, you’ll be charged:

11.74% + Wall Street Journal (WSJ)Prime Rate. Here, 11.74% is the fixed rate.

This means if you didn't pay your credit card bills in full, you wouldn't have incurred any additional interest in the first fifteen months. But after fifteen months, you'll be charged interest on your unpaid dues. Further, this will add to your credit card bill.

Is there some way to avoid paying APR?

The best way to avoid paying APR is to pay your credit card bills in full, every time.