Stop Throwing Away Money with a High-APR Credit Card

Monday, February 3rd, 2014

When your new credit card came in the mail, a whole bunch of pamphlets with small print came with it. If you’re like most people, you either threw them away or filed them somewhere you’ll never have to think about them again. If they wanted you to actually read that stuff, they’d print it a little bigger, right? You know how to make purchases with your credit card, and that seems like the most important thing to know.

But the truth is, the terms and conditions disclosures that come with your credit card are very important. Somewhere in all that fine print is a box that tells you what the fees and interest rates are for your credit card. If you don’t pay off your balance in full each month, the APR—it stands for Annual Percentage Rate—is going to dictate exactly how much extra you’ll pay before getting your balance down to zero.

The difference between a high APR credit card and a low APR credit card can bethousands of dollars depending on how big of a balance you carry. It’s essential that you know your APR and figure out how much it’s costing you.

A $20K difference

If you don’t think there’s a huge difference between a credit card with a 20% APR and one with a 5% APR, read on for an eye-opening illustration of just exactly how much more that high APR card could cost you.

Say you have a balance of $5,000 that you want to pay off. You stop using your card—so, there are no new charges being made—and pay only the minimum payment each month. The interest rate is 20% (or more likely, 19.99%, as that’s the way most credit card issuers prefer to phrase their rates). It will take you about 41 years to pay off that $5,000 balance, and during that time you will pay approximately $21,169 in interest.

Now imagine that same scenario, only the APR on that credit card is 5% (or 4.99%) It will take only 13 years to pay off that balance, paying the minimum payment only, and you will pay a comparatively miniscule $1,177 in interest over those 13 years. A pretty big difference, right?

The best course of action

Of course, 13 years is still a long time, and over a thousand dollars of interest is not insignificant. The best thing to do is transfer the entire balance to a 0% APR introductory offer credit card and pay more than the minimum each month, so the entire thing is paid off quickly with no interest paid.

Whether or not you transfer that balance to a low-interest card or a zero interest card, hopefully this illustration shows you just how important it is to pay attention to the APR on your credit card. The good news is, you don’t have to dig up those tiny-print pamphlets that came with your card to find out what your APR is. It is printed clearly on your statement each month.

Stop throwing away money on your high APR credit card today—browse a selection of low APR cards and find the one that could save you thousands of dollars.

Latest Low APR Credit Cards Guides

How To Know Which Credit Card Is The One For You August 10th, 2016

You’ve searched and searched, but you still can’t decide: which is the one for you? The one that will make you happy for the rest of your life and meet every one of your needs?
Continue »

The Credit Card Number You Need to Know Now January 2nd, 2016

Do you know your credit card number? No, not your account number. There’s another important number you should know: your APR.
Continue »

The 3 Keys to a Great Credit Card: Rewards, Interest Rates, and Fees June 30th, 2015

When you’re looking to add another credit card to your wallet, there are three things to remember: rewards, interest rates, and fees.
Continue »

Why Your Credit Card APR Matters December 29th, 2014

When searching for a new credit card, many people don’t read the fine print. Distracted by the offers of frequent flyer miles, the promise of no interest on purchases for the first 15 months, or the cash back on every purchase.
Continue »

Why Your Credit Card APR Matters July 8th, 2014

Credit cards come with lots of terms attached. Most of the time, those little pamphlets with the fine print end up in the recycle bin, unread. Wading through pages of terms and conditions isn’t most people’s idea of a good time—and besides, all that legal language is hard to ...
Continue »

Best Credit Offer
Check off the cards you want to compare. Then click the Compare link to go to the comparison table.
Consumer Rating: 4 / 5
Pacific Credit Group Emporium Black Card
Copyright © 2001-2016 BestCreditOffers.com All Rights Reserved.

* The BestCreditOffers.com webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. BestCreditOffers.com does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the BestCreditOffers.com website are property of their respective owners.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer. Opinions expressed here are the author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult a card's issuing bank for terms & conditions.

BestCreditOffers.com makes every effort to keep information up to date and accurate. However, the information regularly changes and is presented without warranty. Therefore, we strongly recommend all our readers to visit the credit card application page by clicking "Apply Online!" button to review the detailed credit card's terms and conditions. Note that BestCreditOffers.com may be compensated by the credit card issuers when the readers apply for a credit card through this site.

BestCreditOffers.com is an independent, advertising-supported website which receives compensation from the credit card issuers and companies whose offers appear on the site. Compensation may impact how and where products appear on our site, including, for example, the order in which they may appear on the site pages. BestCreditOffers.com does not review or list all available financial or credit offers.

User Generated Content Disclaimer: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.