Balance Transfer Apr Vs Purchase Apr: What You Need To Know

**Understanding the Difference between Balance Transfer APR and Purchase APR: A Financial Guide**

When it comes to managing your debt, understanding the terms of your credit card can make a significant difference in keeping you on top of your finances. Two popular credit cards that often come with APR comparisons are balance transfer credit cards and purchase credit cards. In this article, we’ll break down the differences between Balance Transfer APR and Purchase APR, including specific financial details, real examples, APR figures, and actionable advice to help you make informed decisions.

**Balance Transfer APR: A 0% Interest Rate on Your Existing Balance**

A balance transfer credit card offers a 0% interest rate for a set period, usually 18 or 21 months. This means that if you carry a balance of ,000 or more from another credit card, you can transfer it to the new card and pay off the balance in full without paying any interest charges.

Here’s an example:

* Balance: ,000
* Interest rate: 0% APR for 18 months (2 years)
* Payment amount: ,250 per month

In this scenario, if you make payments of ,250 per month for 18 months, you’ll pay off the balance in full without paying any interest charges.

**Purchase APR: A Higher Interest Rate**

A purchase credit card has a higher interest rate than a balance transfer credit card. This means that if you charge more than your available credit limit on a purchase, you’ll be charged interest on the entire amount plus any fees associated with the purchase.

Here’s an example:

* Balance: /bin/sh
* Purchase APR: 20% APR (15 months)
* Daily Balance: 0,000
* Payment amount: 00 per day

In this scenario, if you charge a daily balance of ,000 on your credit card and make payments of 00 per day for 15 months, you’ll owe 1,000 in interest charges.

**APR Figures: A Comparison**

| Card Type | Interest Rate APR |
| — | — |
| Balance Transfer Credit Card | 0% – 18 months (2 years) |
| Purchase Credit Card | 20% – 25% APR (15 months) |

**Actionable Advice**

1. **Choose a card with 0% interest for your balance transfer**: If you can pay off the full balance in 18 months, transferring your existing debt to a new

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