The understanding of versions of rates and payments helps to be specified most accurately with a credit card choice.

Let’s consider their basic versions.

Kinds of Annual Percentage Rate
The interest rate (Annual Percentage Rate) is the sum specified in percentage expression to a credit amount which the credit receiver pays for using it counting on the certain period (month, quarter, and year).

For example, 5 percentage quarter rates is equal to 20 percentage annual rate

Interest rates are usual estimated in relation to:

* to the sum on which purchasings are made;

* to the sum of monetary advance (cash withdrawal);
* to the sum of the translated balance sheet from other card.

Annual interest rate on purchasings (APR for purchases). The rate applied to the sum of purchasing which have been made with use of the given credit card.

Annual interest rate on the transfered balance sheet (Balance Transfer APR), such rate extends for the sum which has been translated from other credit account. Annual interest rate for the sum of monetary advance (Cash Advance APR) it is applied to the sum which has been drawn from account in the form of cash.

The multi-level interest rate (Tiered APR), this is such rate which changes the size depending on the balance sheet on the card. For example, 16 % at the balance sheet from 1$ to 500$ and 17 % on the balance sheet over 500 dollars.

Application of the penal interest rate (Penalty APR). An example from treaty provisions of crediting: “In case payment arrives with delay more than two times during the period of six months, the creditor has the right to apply punishment in the form of an interest rate increase”.

Annual interest rate at a preferential induction period (An introductory APR). Such interest rate will be applied to the account till certain time. For example, the annual interest rate equal 0 % with period of validity of the offer till September, 2008 is offered. After the expiration of this term the rate which is specified in the conditions of the credit company will be applied. It is possible to notice also that the interest rate on cash withdrawal always is considerable above than an annual rate on made purchasing.

Versions of commission fee and penal damages

Under certain circumstances credit companies levy a payment from the client.

The annual installment (Annual Fee) is an annual payment for using a credit card. Now only about 20 % of credit establishments establish an annual installment.

Payment for cash withdrawal of money (Cash Advance Fees). The credit companies also establish a certain payment at cash withdrawal from the account (through an ATM, for example).
Besides, very often credit companies stipulate the minimum payment for money withdrawal. For example, the payment for cash withdrawal of money is equal 5 % from the sum, but not less than 3$.
By the way, at balance sheet repayment on the account the sum which has smaller APR and only then the sum which has greater APR at first is repaid.

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