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Living life on borrowed funds doesn’t come cheap. The average credit card interest rate is around 17%, and some cards have rates nearly double that.
Not sure how your credit card’s interest rate affects you? We’ll break it down a bit:
Let’s say you owe $1,000 on a credit card with a 17% APR on purchases. You can calculate your daily APR by dividing 365 into 17, which equals approximately $0.046575.
That means you pay $0.046575 in interest each day. Maybe that doesn’t sound like much, but multiply that number by 30 or 365, and you’ll see just how much credit cards cost over time.
Want to avoid racking up interest on your credit card purchases? Just pay off your purchases before each billing cycle ends rather than carrying a balance.
If that’s not an option, consider applying for low interest credit cards or 0 interest credit cards. You generally need excellent credit to qualify for low interest credit cards, so you might have to repair your credit before you apply. We recommend starting with one of the cards on our list of the best credit cards for bad credit.
Ready to stop forking over so much money for hefty APR fees? Check out the best low interest credit cards below!
Editorial Note: This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.
This article was last updated April 22, 2018 but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.