What is the transfer of APR balance?

The annual percentage rate (APR) is a percentage of interest proportion applied to the account for one year. Transfer Balance APR is a special APR applied to debt that has been moved from one credit card account to another. Balance transfers are a common way to get new customers to move to a specific card. As a result, there are usually two types of balance transmission on most credit card accounts; Teaser or initial rate and permanent rate.

Standard APR are confusing for many people. Most credit card companies express their percentage rates as APR. This amount, divided by 12, is the amount of interest used per month to balance on the credit card. The amount of interest added in the balance of the rest is included in the value of the following month, which means that the card holder pays interest on interest. As a result, monthly interest is always higher when the accumulated month after a month than if APR was applied once a year. APR that applies only to debtfrom another card. This interest rate often differs from the standard APR on the card. This further complicates the calculation of the credit interest, because the only piece of money on the card is in fact two separate amounts that receive composed interest for different rates.

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Balance transfers are one of the most common incentives offered by credit card companies. These transfers are considered a good way to move debt from a competitor. It is not uncommon for APR the aPR the transfer of up to 0%to decrease. Companies assume that while individuals pay the transferred debt, more debt will increase at a standard rate.

These low -balance transmission rates are usually temporary. Since credit companies are legally obliged to publish interest rates, this means that two rates are often given for the transfers of balance - temporary initial rate and permanent rate. Temporary rate is valid for a certain period of time and then fromAčná permanent rate.

Transfer of temporary APR balance is very simple. Any debt moved to this card has a specific rate for a period of time. However, problems can often cause misunderstanding of the basic credit agreement. Card holders must continue to make monthly payments based on their debt amount, although APR is 0%. If they do not do so, the temporary rate may be canceled and the normal rate is taken over. At the end of the initial rate and a permanent rate, this rate begins for all transfers of balance that is currently on the card and all new ones.