Saturday School — How APR Ignorance Can Cost You a Bundle

Saturday School — How APR Ignorance Can Cost You a Bundle Photo by astephan / Shutterstock.com

You probably hear a lot about the APR when comparing credit cards. APR stands for “annual percentage rate,” but it’s not as straightforward as it sounds.

For starters, to really understand your credit card’s APR, you need to know the “real” percentage rate, often called the “effective” APR. To learn more, check out the Khan Academy video that explains the difference between these two rates.

Fail to understand this difference, and you might end up owing a lot more on your credit card debt than you expect.

Once you have this information nailed down, you’ll be ready to shop for a new credit card — which you can do in the Money Talks News Solutions Center.

Do you pay off your credit card bill every month? If so, share your tips for doing so with your fellow readers by commenting below or on our Facebook page.

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