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Watch for APR When You Compare Credit Cards

Though it has its disadvantages, no one will dispute the big convenience that credit cards have brought to the way you live. More than just being convenient, there are many transactions in your daily life where you find that credit cards are necessary. If you use your credit card to settle your bills and pay for your purchases you can make the monthly statements the permanent, well-organised, and detailed records of your expenses. If you compare credit cards with other personal finance facilities you will find that credit cards are the handiest means of making credit available.

One not insignificant advantage if you compare credit cards with other loan facilities is that you get what amounts to an interest free loan for several weeks. If you purchased an item with your card just after the end of one billing cycle, you do not have to pay for it until you get the bill from the credit card company on the next billing cycle. During that whole period, you do not pay interest on the amount. Until recently, this interest free period could run up to 56 days, but the credit card issuers have made changes in their procedure and you now get only 45 days. Still, a 45-day interest free loan is a huge benefit to cardholders.

On the other hand, indiscriminate use of credit cards could pose risks to your financial health. Wrong use of credit includes not paying a significant portion, or even all, of the accumulated charges billed to you each month. This is one area where the annual percentage rate (APR) assigned to you by the credit card issuer is significant. Though you may get an interest free loan for several weeks, you will need to pay the amount when you are billed. If you carry a balance, you will have to pay interest and that’s the APR. When you compare credit cards, this is one aspect you should look at because some credit cards have low APRs whilst others charge higher.

You will need to compare credit cards if you want to get the best credit card appropriate for your needs. This means that you have to ask the right questions to a credit card issuer when you do your credit card comparison shopping. The first thing that you should ask the firm issuing the card is the interest rate that you will pay on the unpaid balance.

If you do not compare credit cards thoroughly, chances are you would choose a card based on its advertised interest rates. But as you study the detailson the card comparison websites that you might visit, look carefully because some cards offer a steady or interest rate, whilst others have variable rates that fluctuate depending on the interest rates prevailing in the credit market.

Once you have done all this you can make your choice. Keep in mind that the advertised rate that you see when you compare credit cards is not the final rate that you will get. The final APR is what you will find in the letter that comes in the mail with your credit card once the issuer has approved your credit card application.

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