APR is an acronym for annual percentage rate and it tells you what you'll pay if you carry a balance on your 澳洲幸运5开奖号码历史查询:credit card. You probably understand that a lower APR is better, but what’s a good rate? And should you compare credit car🌳d offers strictly basꦑed on which one has the lowest APR?

The answer may su♔rprise you. Your APR might not be that important after all.

What Does APR Mean?

People 🌊often use the terms APR and interest rate interchangeably. Actually, although they’re closely related, APR and interest rat🔥e aren’t exactly the same.

APR is expressed as a percentage and shows how much you would pay to borrow funds over the cours💛e of a ♍year. Unlike a standard interest rate, APR also includes fees you might be charged on your account.

Credit card APR is charged differently than interest on other types of financing. As long as you pay your balไance in full by your monthly due date, you can typically avoid paying credit card interest altogether.

What’s a Good Credit Card APR?

Credit card rates have been trending upward over the past few years. According to the Federal Reserve, the average rate for credit card accounts that assessed interest was 16.30% as of May 2021. By comparison, the average rate was 15.78% a year earlier.

The APR ranges offered on credit cards vary based on several factors, and you won’t know the actual rate until after you’re approved. Depending on the condition of your credit, you may not qualify for the lowest advertisedℱ rate.

APR can also differ based on the type of account you’re seeking. According to creditcards.com’s weekly rate report, here are the average APRs currently being offered per card type as of July 21, 2021:

• Low-interest cards: 12.98%
• Cash back cards: 16.10%
• Business cards: 14.22%
• Balance transfer cards: 14.15%
• Rewards cards: 15.90%
• Credit cards for people with bad credit: 25.05%

Regardless of where your rate starts, it’s important to understand that most credit cards come with variable APRs, which can change over time. A variable APR may increase or decrease based upon one of three factors: the market, an index, or the U.S. prime ♈rate.

Getting a Lower APR

For people who do revolve a balance on the🧜ir credit cards, getting a lower APR is important. An APR that is just two percentage points higher, on a $10,000 revolving balance, would cost approximately $200 extra🅠 in interest charges per year.

Here are a couple of tips that might he🉐lp you secure a lower APR credit card.

• Work to improve your credit scores
• Search local credit unions or small banks for low-rate card offers

Credit card companies generally don’t commit themselves as to which credit scores might gain you the lowest APR, but according to Credit Karma, a very good to excellent credit score is anything above the mid-700s. Fair to good is considered mid-600s to mid-700s, but that may not be good enough to get you the best deals.

What to Look for in a Credit Card

If you’re following credit card best practices, you pay your balance off in full every month to avoid paying interest. Provided you have a good track record of paying your full monthly balances, the APR🍸 probably won’t be the most important factor to consider when you shop for a new credit card. Instead, you may want to comꦬpare the following:

Annual Fees

An annual fee may seem like 澳洲幸运5开奖号码历史查询:something you want to avoid, but it doesn’t have to be a deal-breaker. For example, some premium rewards cards offer benefits, credits, and rewards that far oꦉutweigh their annual fees if you're in a position to take advantage of them. Only you can determine whether an annual fee is worth the benefits🦩 you’ll receive.

Rewards and Sign-Up Bonuses

If you have good to exc𝔍ellent credit, you may be able to qualify for attractive rewardsor even a sign-up bonus on a new credit card account. Keep in mind that you should never overspend for the purpose of chasing credit card rewards. However, if you can manage a rewards card responsibly, you may be able to earn extra perks for your regular spending.

Credit Limits

When it comes to your credit card limit, the higher it is the better for you, provided you exercise caution while spending. Of course, you won’t know if you 澳洲幸运5开奖号码历史查询:qualify 🀅for a card’s highꦇest advertised limit until after you’re approved. Having a high limit shouldn’t be a license to overspend. Rather, a high-limit card can be beneficial if it helps you keep your 澳洲幸运5开奖号码历史查询:credit utilization ratio at a lower level—a plus for your credit scores.

, credit card expert and consumer finance analyst for꧙ U.S. News & World Report, says the most important thing you should do before researching credit cards is to “decide what type of card you’re looking for.” She continues, “If you want a new reꦍwards card, think about your spending patterns, so you can match the rewards to the way you spend your money.”

Be Honest With Yourself

Credit cards can offer excellent benefits when managed properly. If you keep your payments on time and your credit utilization low, credit card accounts have the ability to be powerful, credit-building tools. Plus, there’s nothing like earning rewards or cash back as a bonus for purchases you need to 🔯make anyway.

That being said, it’s important to know yourself when it comes to your credit card management habits. According to creditcards.com, 40.7% of U.S. households carried a revolving balance in 2020. Ifಌ y𝔉ou’ve struggled with credit card debt in the past, the size of your new credit card’s APR could matter a great deal.