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What are the different types of credit card interest rates?
- Purchase APR: The interest rate on purchases, typically applied when your credit card balance isn’t paid in full each billing period.
- Balance Transfer APR: The interest rate you owe on balances transferred from loans or other credit cards to the applicable credit card. For most cards, you begin with a low rate (even 0%) for a specified number of months before transitioning to the regular APR.
- Introductory APR: This is an incentive offered by credit card companies to new applicants to give an especially low rate for a certain time period once an account has been opened. This rate (often 0%) is consistently lower than the typical APR for each card. On average, credit cards with a 0% introductory APR on purchases offer around 10 months without interest, while balance transfer cards with introductory APR’s usually last a full year.
- Cash Advance APR: This rate is applied when withdrawing money from an ATM or bank using your credit card.
- Penalty APR: If you miss a due date, this rate could be applied. This rate is more extreme than typical APRs (can be as high as 29.99%) and will be lowered to the standard interest rate after six months of timely payments.
We have multiple resources to help you gain a better understanding of credit card interest rates. If you are interested in learning more, we recommend reading the following:
- What is credit card APR?
- How to get a lower credit card interest rate
- What is introductory APR and how should you use it?
- Fixed rate credit cards and why they are becoming so hard to find
To view more research from the Bankrate team, visit our credit card statistics center.