saving spending and credit

Annual Percentage Rate or “APR”

Credit cards differ in the features they offer. Before choosing one, take the time to learn key terms. APR is the annual rate of interest you pay on the outstanding balance. The lower it is, the less you'll pay to borrow money. APR can be "fixed" or "variable.” Fixed rates stay the same, while variable rates change based on an index. Which of these is also true?

A. The amount you pay for interest gets higher over time.

B. If you miss a payment, this won't affect your interest rate.

C. The interest on different types of credit card transactions may vary.

"C" is correct. For example, the APR on cash advances is usually higher than on purchases. If you miss a payment, the APR on your new balance may go up if you’ve had the account for a year. The APR advertised in promotions is given to borrowers with strong credit histories. If your credit rating isn’t great, you may be charged a higher APR.