Top Credit Cards with Best APR

Created on 21 Apr 2023

Wraps up in 5 Min

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Updated on 03 Nov 2023

Credit cards have become an integral part of our daily lives, offering convenience and flexibility in making purchases and managing finances. However, it's essential to understand the costs associated with using a credit card, including the Annual Percentage Rate (APR).

APR is the interest rate that the credit card company charges on the balance you carry on your credit card. Understanding APR is crucial because it can significantly impact how much you pay in interest charges and how quickly you can pay off your debt.

In this blog, we will walk you through the basics of Annual Percentage Rates, how they work, how they differ from interest rates, and how to calculate them. By the end of this blog, you will have a better understanding of how APR affects your finances and how to use it to your advantage.

What does Annual Percentage Rate mean in Credit Cards?

Annual Percentage Rate (APR) is a way of calculating the interest rate on your credit card. It's also used to calculate other fees like annual fees, late payment fees and over-limit charges.

The APR is calculated by taking into account several factors, including:

How to calculate interest rates from APR?

In order to understand how credit card interest rates work, it's important first to understand what APR is. The Annual Percentage Rate (APR) is the rate of interest that you pay on your credit card balance each year. This number can be expressed as a percentage or as a decimal--for example, if your APR is 18%, this means that for every ₹100 you borrow from your bank or credit union, they will charge you ₹18 in interest payments per month until the balance is paid off completely.

In order to convert an annual percentage rate into monthly payments and vice versa, use this formula:
Monthly Payment = (Annual Interest Rate x Principal Amount) / 12

To calculate the Annual Percentage Rate (APR), you need to know how to calculate simple interest. Here's a step-by-step process:

First, multiply the principal amount by your annual interest rate. For example, if you have borrowed ₹1 lakh at 10% per annum and want to know what your monthly instalment will be, then first find out what 10% of ₹1 lakh is by dividing it by 10: 1 lakh x 10/100 = ₹1 lakh annual interest

Then divide this number by 12 months in a year: 1 lakh / 12 months = ₹8,333 per month

Credit Cards with the Best APR

While the annual percentage rate is not the only metric that should be considered while getting a credit card, it is a pretty comprehensive measure of the cost you might incur for owning a particular card. Below is a list of credit cards with some of the lowest APRs in the markets:

Card Name

Annual Percentage Rate

Axis Bank Burgundy Private Credit Card

19.56%

YES FIRST Exclusive Credit Card

23.88%

HDFC Bank Infinia Credit Card

23.88%

HDFC Diners Club Black Credit Card

23.88%

Axis Bank Vistara Infinite Credit Card

41.75%


What is 0% APR?

Credit card companies may offer different types of introductory APR, such as 0% APR for a limited time, which means no interest will be charged on purchases, or a low fixed APR for a limited time. It's important to read the terms and conditions of the offer to understand the length of the introductory period, the APR that will apply after the period ends, and any fees associated with the offer.

Overall, an introductory APR can be a useful tool for credit card users to save money on interest charges, but it's important to use it responsibly and understand the terms and conditions of the offer.

When a credit card company offers an "Introductory Annual Percentage Rate" (Intro APR), it means they are offering a lower-than-usual APR for a set period of time when you open an account. This period can vary depending on the credit card and the offer. In India, similar to other countries, the introductory APR may apply to a card's purchase APR or balance transfer APR, or both.

During this introductory period, you may be able to save money on interest charges by making purchases or transferring balances to the credit card, as the interest rate will be lower than the standard rate. It's important to keep in mind that the introductory period is temporary and that the APR will increase after the promotional period ends.

Difference between APR and interest rate

APR stands for annual percentage rate. It's the total cost of borrowing money, including interest, fees and other charges. The APR is calculated by adding up all of the costs associated with a loan or credit card—including any fees or penalties you may incur for late payments—and then dividing that sum by the amount of time it takes for you to pay back your debt (typically 36 months). 

In other words: the APR is a measure of how much you'll pay on your loan over time. This can be helpful when comparing loans of different sizes and durations; however, it doesn't tell you the total cost of borrowing money.

On the other hand, interest rates are just the cost associated with the principal borrowed amount. Interest rates, along with the various fees and charges levied by the credit card issuer, form part of the Annual Percentage Rate.

So, to summarise,

Conclusion

In conclusion, it is important to understand the Annual Percentage Rate of a credit card. The APR can have a significant impact on how much you pay for your purchases and how quickly you pay off your balance. The Indian economy has been experiencing rapid growth over the last decade, but there are still many people who do not have access to credit cards or other forms of financing. This means that many Indians rely on cash payments for most purchases, which makes it difficult for them to take advantage of low interest rates offered by banks and other financial institutions.

In order to manage their debt responsibly and avoid getting into trouble financially, consumers should make sure they know exactly how much money they owe at all times so they can make informed decisions about paying off balances more quickly or taking longer than expected before making another purchase with their credit card.