How does credit card APR affect you even if you pay off your balance in time?

I've been thinking as long as you pay off your credit card balance in time before their due date, you only pay for what you swipe. I thought APR kicks in ONLY if you don't pay in time.





Am I wrong or right? Please explain. Thank.|||You are right. As long as you pay the balance every month you will not be charged any interest. Unless you do cash advances and those you are charged interest right away.|||Part of this is true. On an average credit card interest is only figured in if you carry a balance month to month on PURCHASES. With a cash advance, interest starts accumulating from time of transaction. Paying of purchases in full each mont is the best way to go so that you are living within your means and try to avoid cash advances. Hope this helps!|||It's a little fuzzier than that, and it depends on the company. Often you have a grace period of about 20 days, but you don't get your bill until 30 days, so you get nailed if you wait. You can avoid any interest payment if you pay "right away" but what constitutes "right away" differes from company to company. Invariably, it's less than the window for their statement date.|||Yes, that's correct. If you pay in full every month by the due date, you will not incur interest. I pay 1 day before the due date, just to be safe.





The best way I've found to use credit cards is this:


1. Find the rewards card(s) that will pay you the most for your normal spending (i.e. what you need and have cash to pay for)


2. Funnel most/all of your normal spending through your reward credit card(s) without max'ing them out


3. Always pay in full and on time every month





That way you'll:


1. Build your credit quickly


2. Avoid interest and fees


3. Earn nearly maximal rewards





To find the rewards card(s) that will pay you the most for your normal spending profile, you can use this rewards calculator:





http://www.creditcardtuneup.com/|||apr stands for actual percentage rate, and its is based on the balance less any fees(points, processing, broker fee, title insurance, etc.) times the interest rate. therefore in a mortgage they deduct points, some closing costs, etc. that is why you will see the apr is always higher than the quoted interest rate. samething for credit cards, however, if you pay it off each month there is no interest payment so the apr and interest rate would be the same. apr is a figure dreamed up by the govt. to show you the true interest rate you are paying based on the funds available to you.