I was just wanting to make sure, does that mean that they will charge you the APR percent on every single purchase you get? Can you ever purchase and pay on time and not pay APR?
2006-10-26 09:30:46 · 8 answers · asked by Anonymous in Business & Finance ➔ Credit
Read the "agreement". It spells out how you repay what you charge, and when interest is charged and when it isn't.
2006-10-26 09:38:19 · answer #1 · answered by Anonymous · 0⤊ 0⤋
The APR means that's how much the bank will charge you on your balance over the course of a year. For example, if you have a card with an APR of 21%, what they're telling you is that you will pay 21% on your balance for the year...not per month and certainly not for each purchase. In this case, the 21% is what's known as "annualized" which simply means that your monthly rate is really 1.75% because 21 divided by 12 = 1.75
Therefore, if you maintain a balance of $1,000 on your credit card you will be charged $17.50 per month (which is 1000 x 1.75%). In other words, $17.50 for every month in which you keep a balance of $1,000
Hope this helps.
2006-10-26 09:46:57 · answer #2 · answered by henry315_ny 3 · 1⤊ 0⤋
The APR will be the amount of interest they charge you on your TOTAL balance you keep, so if you always pay your credit card off you will not pay interest.
Say you have $5000 on a credit card at 10%, each month you will have to pay $500/12 + some principle.
2006-10-26 09:39:48 · answer #3 · answered by tightlies 3 · 0⤊ 0⤋
A lender cannot charge interest on interest.
The correct method of calculating interest is as follows:
The unpaid balance multiplied by the apr then divided by either 360 or 365 then multipled by the number of days in the billing cycle.
The 360 or 365 is the number of days in a year. The FRB, FDIC etc allow either the use of 360 or 365 in that calculation.
This is the method to find out the amount of interest charged on all debts that are interest bearing - meaning the balance does not already include the interst. Those debts are called pre-computed.
2006-10-29 05:11:24 · answer #4 · answered by chey_one 3 · 0⤊ 0⤋
The credit card charges interest on a balance not paid off each month. If they charge you interest this month and you don't pay the balance they charge you interest on the balance next month which includes the interest charged last month. So, you are paying interest and the interest so the true rate of interest you are paying is compounded and called the APR (annual percentage rate).
2006-10-26 10:14:44 · answer #5 · answered by waggy_33 6 · 0⤊ 0⤋
Most credit cards will not charge you interest (AKA APR) if you pay off your purchases in full within the billing cycle.
Interest is usually tabulated once a month, using your average balance for that month.
2006-10-26 09:38:20 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Usually with a credit card if you pay off the total balance before the due date you don't get charged the interest. Otherwise you need to check your contract to find out the details. They have a truth in lending statement they have to reveal to you before you signing up. Usually on the back of the credit card offer. It will tell you all the details of your offer.
2006-10-26 09:39:53 · answer #7 · answered by pammy 4 · 0⤊ 0⤋
ANNUAL/AVERAGE PERCENTAGE RATE. is charged on purchases that you have borrowed money to spend if your card is paid on time the rate can be fixed or 0%.LF
2006-10-26 09:40:22 · answer #8 · answered by lefang 5 · 1⤊ 0⤋