Question 1

Can your APR change?

Accepted Answer

Yes, your APR may change for several reasons. For example, if your credit card came with a low intro APR, the APR will increase when the introductory period expires. Your card issuer may also raise your APR if your credit score goes down or lower it if your credit score goes up. But a new APR shouldn't catch you by surprise. Under the Truth in Lending Act, card issuers must give you a 45-day notice before changing your APR, unless the change has already been specified in writing (like your card agreement). For example, if you signed up for a card with a variable APR, it may change based on the prime rate, or the baseline rate that a financial institution uses to determine its interest rates. Fluctuations in a variable APR don't require advance notice since they're outlined in your credit card agreement. A credit card with a fixed APR shouldn't fluctuate unexpectedly.

Question 2

What's a good APR for a credit card?

Accepted Answer

What constitutes a good APR depends on your personal credit background and the type of credit card you want. A wide range of factors influence credit card APRs, from economic trends to the type of credit card to your credit history. A card with a high rewards rate or one that's geared toward people without much credit history may have a higher APR on average, for example. You may want to compare the APR ranges in the current terms of any cards you're considering to find the most competitive APR for you.

Question 3

Can you improve your APR?

Accepted Answer

Yes, you may improve your APR. Your credit history typically influences the interest rate you receive. Boosting your credit score may help you qualify for a lower APR. You may be able to build a strong credit score by making on-time payments each month and keeping your balances low, if possible. If your credit score has improved since you opened your credit card account and you've never missed any payments, you may be able to request a lower interest rate from your credit card issuer.

Question 4

How does APR affect credit card payments?

Accepted Answer

Your APR may have a big effect on your credit card payments if you tend to carry a balance. If you have a high APR, then a significant portion of your payments may go toward your interest charges, especially if you only make the minimum monthly payment. You might have to make bigger payments to chip away at your balance. A high-interest credit card may take longer to pay off than a card with lower interest. If you want to know how long it may take you to pay off your balance with interest, or how much you need to pay each month to clear your debt by a certain date, you may use the Discover Credit Card Interest Calculator to do the math for you.

Question 5

Can you avoid interest on a credit card?

Accepted Answer

Yes, you may be able to avoid interest on a credit card by paying your entire credit card statement balance in full every month. Many credit card issuers offer a "grace period" on purchases between the end of your billing cycle and your payment due date. If you consistently pay your entire statement balance by the due date, then you may not be charged interest on new purchases within the grace period. But if you pay less than the full balance, you may lose the grace period for that month. Grace periods may not apply to other types of transactions, like cash advances. Not all credit card companies offer a grace period, so it's important to confirm by checking your cardmember agreement. Avoiding interest on your credit card may not only save you money but also help you make the most of your credit card rewards, as interest charges may cut into your cash back.

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