Although your credit score will ultimately determine your interest rate, apply for a lower APR and you could save a ton on interest charges. Here's an example of how much you can save just by reducing your current APR:
Your current credit card has an APR of 14.99%. But you've been pre-approved for a credit card at 9.99%. Over the course of a year, you could save 5% on interest charges. How does this add up?
Save with a Low APR:
Assume you have a balance of $5,000 on your credit card:
OLD CARD: 14.99% = $ 749.50 per year in interest charges NEW CARD: 9.99% = $ 499.50 per year in interest charges
In this example, you could save up to $250 per year! If you had a balance of $10,000, you could save twice as much! This extra money could be used to pay down your current credit card balances or used to make cash purchases and avoid increasing your existing credit card debt.
Save with a 0% APR:
Again, assume you have a balance of $5,000 on your credit card:
REGULAR CARD: 9.99% = $ 499.50 per year in interest 0% APR FOR 12 MONTHS: 0.00% = $ 0.00 per year in interest
Your savings are even more impressive! These offers have become increasingly popular in recent years because they offer a multitude of ways to avoid interest and pay off your existing debt more quickly. Not only can you save on new purchases, but you can pay zero interest on balance transfers.
Saving EVEN MORE:
You can clearly see the savings a 0% APR provides (especially during the intro period). But if you transfer your existing balances before the intro period is over, you can save much more! Essentially, you can carry your credit card balances interest-free as long as you switch your credit cards before the intro periods end. Many people have taken advantage of this method to pay off debts and save thousands of dollars in interest. But be aware, switching credit cards too frequently can have a negative impact on your credit score. So use this method in moderation.
