5. APR and credit cards

Possibly one of the most prominent features of a credit card you will see advertised is its interest rate, or APR.

When you borrow money on a credit card you have to pay the provider for the credit service. Lenders charge interest on the amount you borrow as a fee for lending you their money.

Interest rates vary between providers and then between different types of credit cards. However, the variation in interest rates doesn’t stop there because it is then likely to vary between different types of people too. Two people could apply for the same credit card, from the same company, through the same channel and still be given different interest rates.

The APR quoted will reflect your current credit score, your credit limit, your age and your salary, plus take into account any current promotions running on the card. Some providers have even been known to offer different APRs depending on how you apply for the credit card.

This section will help you to understand more about interest rates applied to credit cards including what APR is, how interest charges are calculated and what you can do to get a lower APR.

If you are going to get the most from your credit card, you first need to understand what APR is.

Back to Guide to Credit Cards Contents

Product Offers
Please ensure that you fully read the terms & conditions of any product or policy before you decide to proceed and are fully aware of the total costs and the benefits and any exclusions or limitations applicable to the product or plan.

Please note that the product links will take you direct to the Issuer or Insurer's site direct and we cannot be held responsible for the information which they provide within their own sites. On some comparison tables we use a star rating which rates products by visitor popularity.