Credit Cards and APR

<p>I know next to nothing about APR, can someone explain it to me? Thanks, I know this probably seems like a dumb thread, but figured I'd get a solid answer here.</p>

<p>APR only matters if you don't pay off your balance in full every month; more or less it's the interest rate. Since you definitely definitely DEFINITELY do want to pay it off every single time, it doesn't matter! :)</p>

<p>Ok thats what I assumed in the first place, but I guess I got lost along the way.
I'm pretty good with my money, so I don't think late payments will be a problem.</p>

<p>Thanks</p>

<p>It's not an unwise idea to take advantage of limited 0% APR offers if you have somewhere to invest the money while you wait for the 0% APR offe to run out. You still have to make minimum payments during this period and you should read your credit card agreement to make sure there aren't any tricky details. </p>

<p>Safer to pay off in full every month.</p>

<p>Basically, if your credit card is not paid in full, the APR kicks in on your original balance. Obviously, you don't pay the 19% APR interest rate on your monthly payment; rather, you pay the calculated monthly rate (they explain it rather awkwardly on your credit card bill) which is usually in the area of 2-3% (it may be higher, I'm guessing ballpark here). This amount is applied to your total balance remaining, and your monthly cycle will start all over again.</p>

<p>Say I have a $100 balance on my CC. My minimum payment is $15. I pay $20, leaving $80 on my CC balance. They take the monthly interest equivalent of the APR (let's say 2% in my case) and apply it the original balance. So I end up having $82 left on my credit card balance, because I failed to pay off the debt in full during the grace period. This is a very simplistic explanation, and it differs by bank, but this is how my CC company does it.</p>