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Credit Card APR doesn't make sense at all. Too low?
Hello,
I have had a Capital One credit card since late March/early April. I had a 6 month 0% APR intro rate. After that, my APR was supposed to be 22.9%.
It is now December (9) months, and I have noticed on my bill that there are two APRs mentioned.
One is for purchases, with a corresponding APR of 10.9%, and the other is for cash (if I were to use the card as a debit card and get cash from an ATM), with the APR I was told of 22.9%.
I am a little confused as to why my purchase APR is only 10.9%. This is my first credit card, and I am 18 years old. It is not a pre-paid credit card, and it's by Capital One. Is it normal for a first credit card to have this low of an interest rate?
I'm a little confused, but not complaining. Just hoping someone can explain this to me. Thanks!
5 Answers
- bdancer222Lv 71 decade agoFavorite Answer
You must have been smart about making payments and not carrying balances for the first 6 months. Capital One is giving you a decent interest rate.
Best way to deal with any credit card is only charge what you can afford to pay in full each month. That way you don't pay interest and build good payment history.
Source(s): BD - R TLv 71 decade ago
That is normal. Purchases have a lower APR and a grace period. Cash advances usually have a higher interest rate and always start drawing interest from day one. The idea is that they don't want you to use the card for a cash loan, make interest off the cash, and then they get nothing because of a grace period.
Source(s): /// - Anonymous1 decade ago
That is a good interest rate for a credit card. A lot of them have 20-30% right now. I wouldn't complain! I'm guessing that they reevaluated your interest rate when it was converted over. Try not to charge up on the credit card. We only use ours for expenses that we can afford to pay off every month.
- mommyoftwo53Lv 61 decade ago
Is there any chance that when you first received the credit card you read the APR's wrong for purchases? If not than just take it and enjoy a lot lower APR.
- 1 decade ago
That's normal. Lesson 1 in finance...a loan at 10.9% is NOT low and you should not keep a balance on the card at all. Hopefully it goes without saying that a cash advance on it is foolish.