You might have seen APR (Annual Percentage Rate) in your credit card terms & conditions or in the bank’s schedule of charges and you might want to know what it is all about. Well, Annual Percentage Rate is very important to understand if you use your credit card for shopping in a mall, cinema, online payments or any cash transaction.
Normally if you use your credit card for retail transactions, stay within your credit limit & pay bills within due dates, no APR is applied normally. But since when you use your credit card frequently, sometimes you might deviate from your normal routine or you might be in urgent need where you may want to use any option from your credit card. Well, in that case you should know about APR.
APR is the Annual Markup Rate that is applied on your transaction amounts according to transaction types and number of days between your transaction date & complete amount payment date. It is simply multiplied with the transaction amount & no of days divided by 365 (for days in a year).
These rates vary according to the type of transaction which are explained as follows:
| APR for Retail Transactions | These charges are applied on retail transaction when you do not pay your complete bill i.e. the total billed amount and pay any amount less than that. If you pay your total bill on due dates, these charges are not applied. To know how are these are calculated CLICK HERE! |
| APR for Cash Transactions | These charges are applied on Cash transaction when you draw cash using your credit card. This rate applied according to number of days between transaction date & total payment date. FED (Federal Excise Duty) is also applied on these transactions. To know how are these are calculated CLICK HERE! |
| APR for Balance Transfer Facility (BTF) | These charges are for using BTF Facility, which is a facility provided by most of the banks where you can transfer your outstanding dues from one credit card to another. That means if you have outstanding dues on your Silk Bank Credit Card & you want to transfer them to your Allied Bank Credit Card and pay along with Allied Bank Credit Card’s bill. To know more about the rates by various banks, CLICK HERE! Some Banks also offer installments on these transferred balance amounts. |
| APR for Installments | Well, many banks provide Interest Free or Zero mark-up easy installments on many products & transaction with some installment fee & Federal Excise Duty Charges. But if you want to convert any of your dues into installments, then APR for installments rate is applied on the total amount on annual basis. |
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