How to Understand Credit Card APR's

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A credit card APR, or annual percentage rate, is the interest rate charged on credit card balances. Be mindful of changes in a credit card APR with tips from an investment consultant in this free video on credit cards.

Part of the Video Series: Personal Finance & Money Management
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Video Transcript

Hello my name is Roger Groh and today we are here to talk about interest rates that you pay on credit cards that you use and specifically what the average annual percentage rate on your card is. Interestingly yesterday the United States government passed a bill that changes the way that you have to be notified if interest rates changed. It used to be that the lending institution could change your rate where you had no say. Now you do and it goes into effect, the bad news is that it goes into effect in June of 2010 but at least there is some help coming for consumers. Be very careful. Although your credit card annual percentage rate or APR might start low at 5, 6 or 7% called the teaser rate. Frequently if you don't pay your balance they can jump rapidly into the 20's. As a matter of fact I know somebody who paid 28.99% because he missed two payments so that's a little bit about annual percentage rate and I'm Roger Groh.

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