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Intro Apr

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.

Another area to research is the fine print describing balance transfers. While it’s true that the Intro Apr for balance transfers is going to be whatever the offer claims, you might be charged a fee for transferring your balance. When you sign up for a new credit card you’re signing a contract so you had better understand the terms!
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