Questions regarding credit card APR

Started Feb 15, 2013 | Discussions thread
dad_of_four
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Re: Questions regarding credit card APR
In reply to truthsforme, Feb 16, 2013

truthsforme wrote:

So first, can you improve your credit card's APR? Currently, my APR is 20%, so to improve it all I need to do is pay balance full on time?

If you pay your balance in full each month, you will owe no interest, so it doesn't matter what your APR is.  If your credit card does not have a grace period, find a new card, and stop using the old one.

And does your APR determine whether you're in good or bad credit standing?

It's the other way around.  Bad credit = Higher APR

And lastly, if I pay my full balance every time between billing periods, wouldn't that affect my credit score in a negative way?

No, in fact it will improve it.  Part of your credit score is based upon the ratio of current debt vs. available credit. If you have no debt, but lots of available credit, your credit score will rise. Also, paying  your bills on time, every time will raise your score.  Even a single 30-day late payment will affect your score.

Other tips: Don't close unused cards (unless they carry an annual fee). Closing a card changes your available credit, which changes your score.

If you do carry a balance, and it is 20%, call your CC company and ask for a lower rate.  Be prepared to open a new account elsewhere and transfer the balance to a lower APR card

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