Annual Percentage Rate (APR)
What is an APR?
APR stands for Annual Percentage Rate, also commonly known as interest, and it represents the cost of borrowing on a yearly basis.
With different credit card companies, annual percentage rates may vary. Depending on your credit score and your lender, your APR may fall anywhere in the 9-22% range. That number is the annual percentage, so to determine your monthly interest rate on that card, you would divide the percentage by 12.
The easiest way to accrue interest charges is by either missing payments or not paying off your full balance each month. If you are only paying your minimum balance per month, interest charges will add up quickly from month to month.
For example, if you have a balance of $1,000 and a 20% APR and only pay the minimum $35 payment each month, it would take you over two years to pay off your balance. In addition, you would end up paying upwards of $400 in interest.
To avoid paying interest, you can pay off your balance in full each month. In addition, many credit card issuers, including Southland, offer 0% APR credit cards for an introductory period. With these offers, you don't pay any interest on purchases and balance transfers; just make sure to pay off any balances before the intro period ends.