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An Intro Apr is a limited-time rate offered by
issuers of
credit cards. Typically an Intro Apr is very
low because it’s designed as a way to capture new
business. The Intro Apr is a figure that is used
for the calculation of interest payments.
Intro Apr means Introductory Annual Percentage
Rate. The word “intro” is what’s important to
distinguish. Every
credit card will have an
APR which is used to determine the amount of
the
finance charge you will be required to pay as
you use the credit card. That is why it’s
important to understand what APR means and how it
is calculated. It can be calculated on a daily,
monthly or yearly.
The typical Intro Apr usually only applies to new
purchases and depending on the offer, it may also
apply to
balance transfers. When you receive such an
offer, the outside of the envelope will boldly
announce the Intro Apr as a way to entice you into
opening the envelope so you can see what’s inside.
Once inside, you’ll again be offered this
amazingly low Intro Apr. The rate will be
splattered all over in big, colorful letters. But
take notice. This is not the figure you should be
focusing on. What you need to do, before reading
any further, is to follow the asterisks (*) until
you find the fine print. This is the section that
matters most.
Remember, the Intro Apr is designed to capture
your business. But the rate you see here will be
available only for a limited time. It may be 3
months or 6 or perhaps even a full 12 months. Once
the introductory period expires, however, the APR
on that credit card likely will jump into the
double digits. The amount that Intro Apr is going
to increase by is what you need to determine and
you’ll find your answer in the fine print.
After the Intro Apr expires and the regular APR
kicks in, it might continue to increase. That’s
why you also need to know whether the APR after
the introductory period is going to be a
fixed rate or whether it’s variable. |
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