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APR, AER and EAR are terms used in financial advertising. What do they mean?

Have you ever scanned the acres of financial advertising and wondered what APR, AER and EAR really mean? You’ll invariably find one or another of these terms in every advertisement for a lending or savings product. Well you’re certainly not alone.

The Financial Services Authority lays down the exact formulas for calculating APR, AER and EAR’s. Every UK financial institution then has to stick by the formulas and the FSA lays down rules as to when and how the figures have to be disclosed. There are no exclusions! Errors invariably result in big fines for the offending company and compensation for any borrower or saver affected. But it’s still no good if the public simply don’t understand what the terms mean.

So here’s our bit to lift the mists of misunderstanding!

APR is most commonly seen. It stands for “annual percentage rate” and is used to express the true cost of the money borrowed on credit cards, loans and mortgages. The APR calculation takes account of the basic interest rate, when it is charged (i.e. annually, monthly, weekly or daily), all initial fees and any other costs you are obliged to pay. As lenders all calculate APR the same way, it enables you to make direct cost comparisons between competing lending products.

So if one bank is offering you a mortgage at 4.75% plus an arrangement fee of £450 and a building society is offering you an interest rate of 5.1% with a £100 fee, then the APR figures will show you which of the two mortgages is the cheaper.

There are then two further expressions you’ll see that include the term APR. X% APR variable means that the borrowing cost is currently X% but the rate of interest is not fixed and is likely to vary (up or down).

The second is X% APR Typical variable. You’ll regularly see this expression in loan promotions. It means that the lender cannot be specific about the interest rate you’d be charged as their rates vary, usually in response to your personal credit history and the amount of money you want to borrow. Therefore X% APR Typical variable, is used to provide a general impression of the interest rate you can expect to be offered. The addition of the word “Typical” means that at least two thirds of applications that the advertiser approves are at that APR or cheaper . Then if a loan is offered to you, the paperwork will reveal the actual APR or APR variable you are being offered.

Now lets turn our attention to EAR. EAR is the abbreviation for “equivalent annual rate”. It’s used to demonstrate the full percentage cost of overdrafts and accounts that can be in credit and also go overdrawn. The calculation accurately illustrates the cost of the overdraft facility. In common with the APR calculation, EAR takes into account of the basic rate of interest charged, when the interest is charged, plus any additional charges. So in most respects EAR and APR do the same thing — it’s just that APR applies to pure lending products whilst EAR applies to a product, such as a banking current account, that can be held in credit or go overdrawn.

Incidentally, the EAR and APR figures always exclude any Payment Protection Insurance you’ve bought to guarantee that the monthly repayments will be maintained if you’re off work due to accident, sickness or unemployment. That’s because this insurance is always an optional extra and is never a condition of the lending.

AER on the other hand is only used in relation to savings and interest based investments. It’s concerned with the rate of interest you’ll receive on your money. AER is short for “annual equivalent rate”. It shows the adjusted rate of interest you’ll receive at the end of a twelve-month period taking into account the regularity of which interest is credited to the account. (This is necessary as the frequency of payment has a compounding affect on the amount of interest you actually receive). The formula for AER also removes the affect of any promotional offer that disappears after a few months — a popular ploy used by financial institutions to send their savings products to the top of the Best Buy lists.

You’ll probably forget most of this as it’s yawningly boring but we hope we’ve shed light on some of the most important financial jargon you’re faced with!

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How to Evaluate Zero APR Credit Card Offers

An APR or the Annual Percentage Rate is the combination of monthly finance charges and interest rates expressed annually. Every credit card has different APRs. For example there is a certain rate of APR for purchases, cash advances and balance transfers. The cash advances have the highest APR compared to credit purchases and balance transfers. Balance transfers carry the lowest rates usually. The zero percent APR normally applies to balance transfers and promotional credit cards like the students credit card.

The Zero APR is prevalent for a specific introductory period which lasts for six months or a year. Lets evaluate what exactly the 0% APR really man? Let’s say you have a high interest rate balance outstanding on an existing credit card. You have also used most of the credit. The zero percent APR credit card gives you the benefit to transfer your balance onto this card without any additional interest to be paid. The zero percent interest rate is usually there for the promotional period. It reverts to the higher rate at the end of the promotional period.

People are enamored by the fact that they do not have to pay an interest for the time being and also that the APR is delayed on the account. The 0% APR is a good deal if you make a significant purchase and make the payment before the introductory period is over. Read the credit card documentation and fine print to understand the exact definition of ‘introductory period’. Mostly the first purchase triggers off the start of the zero percent interest credit balance rather than the beginning of the first billing cycle. Also find out if you lose your right to avail of a zero percent APR if you make or do not make certain purchases or refrain from making payments within a certain time.

You have to also ascertain what the APR of the credit card will stand at after the introductory period is over. If the interest rate is going to be higher than the APR of other credit cards that do not offer zero percent APR in the first place, and you are not going to make the most use of the zero percent APR, then the former card is not of much use. You can always do with the card with a low interest rate as more useful in the long run. Invest your time in research online and get in touch with experts in the field of credit cards, who can take a stock of your spending habits and find out if a credit card with a zero percent APR can really suit your needs.

Approved or Rejected? – Business Credit Card Application

If you’re planning on getting a credit card, are you apprehensive because you are worried you will be approved or rejected? Here are a few words of advice to ease your worries.

Make sure you are aware of your credit score. You can get a copy and check if all the data and charges on your report are all correct. If it is precise but you become aware that you have a low credit score, it is time to start a make over on your credit.
Be an on time payer. It is best to improve your credit score because every business credit card application requires you to have a good credit score. After you receive your statement of account, make it a point to settle all your bills and submit your payments on time. One should not miss or delay on your payment because you aim to improve your score.

It is also a sound idea to keep your old credit cards. Although it is not active and you want to close them because of their high cost and interest, it is best to keep them because they play a significant role in your credit card history. Closing down your old credit cards would be like deleting your previous parts of your credit history. So keep them but you don’t have to use them.

If you can, it is best to focus on repaying all your balances with all your creditors in full. In a way, you are pushing a boost to your credit score.

If you have a credit limit of ,000, an ideal consumption of your credit limit would amount to only ,000. That is only 40% of the actual credit limit. Going beyond 40% o

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Preventing Credit Card Application Scams- Answered

Filling up the online credit card application form is the first baby step, as well as a giant one, towards getting a credit card. If you take the online route, you save yourself days of waiting, as well as tons of effort. However, this alone is not the main reason why you should opt for the online mode.

The credit card industry is a fiercely competitive one. With about a dozen card issuing company, tens and thousands of affiliate sellers, hundreds of card options and millions of existing as well as probable customers- the industry is as competitive as it can possibly get. Another feature that makes this industry a tough one is the fact that the customers are informed, knowledgeable and have a rational thinking process.

Today, credit card industry is a matured one, with most of the customers being repeat ones. Given all these factors, card issuing companies are going all out to win over prospective customers. One of the most commonly used marketing strategies to win over customers is to introduce card offers for niche segments, catering to a specific segment of customers.

Examples of niche marketing will be cards for students, cards for buying gas, air tickets, groceries etc. Special cards were also introduced aimed at people with various statures, like cards for people with bad or no credit, cards for students, for tenants etc. Given such a plethora of offers, picking up the best card is often a tedious job – a job that requires gathering information about all offers, comparing and evaluating them, and then deciding on the best fit offer.

Online credit card application forms are generally accompanied by a goldmine of information. As a rational customer, it is your duty to settle on a given offer only after you have thoroughly evaluated and compared other competitive offers. And, the World Wide Web is the best possible platform where you can source and analyze all the information you want.

However, while scouting for information on the Internet, chances are that you will stumble across affiliate sites. Affiliate sites are intermediary marketing firms that act as an interface between the card issuing companies and the prospective customer. These sites act as a great source of information, and a one stop solution for all your card needs.

However, it is to be clearly understood that these sites are just intermediaries and in no way are they allowed to ask for any confidential information like SSN or any other such details. If you come across an intermediary file that is asking for these details from you, understand that they are malicious in nature and take no time in leaving that site.

The Internet is a tool that has changed our life beyond imagination. And it has changed both for worse and for better. While intermediary sites have our life easier, malicious sites have succeeded time and again in scamming people. However, it will be better idea to apply common security measures rather than shunning the net. In a nutshell, embrace technology and use the online credit card application form when needed.

Many Merchants Accept Credit Cards Online

The computer geniuses that have developed computers and the internet have made life easier for anybody with a computer and a modem. There are so many errands and duties that people can accomplish because many merchants accept credit cards online. People can buy their whole wardrobe from a wide variety of merchants because these vendors accept credit cards online. Parents can also buy all of the necessities for their children from the merchants that accept credit cards online. They can also buy their back to school supplies at their computer terminals by using their credit cards online.

The fantastic system that links home computers to many different sources via the worldwide web means that people can do all of their shopping because even the grocery stores accept credit cards online. Grocery stores have services for those who do not want to come into the store. These people order their items at stores that accept credit cards online, and the groceries are delivered to their door. They can order flowers to send to their mothers on that special day or send a birthday gift to someone in Japan from merchants who accept credit cards online.

People Pay For Services At Agencies That Accept Credit Cards Online

Before the internet, people had to appear many places to do different things that can now be accomplished by groups that accept credit cards online. Many gas and electric companies will let their customers pay their monthly bills through a website. The banks have systems so people can transfer money from their credit cards to their bank accounts without leaving their computer terminal in their home. These banks often offer credit cards that people can use to pay for many different things online.

People can pay for many other things because the organizations accept credit cards online. The Internal Revenue Service now accepts credit cards online so people can pay taxes without writing out a check. Many city organizations accept credit cards online so people can take care of their municipal taxes without leaving home. Sports and civic organizations allow people to pay with a credit card online, and people can book their tickets, pay for them and receive them soon after in the mail. Some schools accept tuition and fee payments with credit cards online so parents can pay whether their child is at university or a school down the road. Services that can be performed on the computer are numerous now, and this has simplified many payments that are necessary to daily life.

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Three Tips to Finding the Best Balance Transfer Options

When it comes to balance transfers, there are many benefits for those that find just the right opportunity and take the best of them. There are plenty of opportunities here, though. The balance transfer is one of the best ways to save money in the long term and the short term. If you invest a bit of time in finding the best opportunity, you will find rewards in the long run. That is because these balance transfer credit cards are designed to save you money if and only if you use them correctly.

How They Work

A balance transfer credit card sounds like a good thing, but do you know how and when to use them? There are several key elements that come into play when you are considering them. So, take a look at these points.

1.Determine if the balance transfer offers a lower APR than you’re currently getting. the annual percentage rate on credit cards is the most essential piece of the credit card puzzle. It indicates, as a matter of fact, what you will pay for the credit card purchases you make over time. On the balance transfers you are considering, determine what the rate is. If it is higher than you are currently paying, you are simply wasting your money by moving it. A lower APR is an opportunity to save.

2.Determine introductory APR’s. One of the largest incentives is introductory rate on a balance transfer credit card, which is generally either 0% or comparably very low. This number is a crucial number to take into consideration. How long will you have to save? What is the APR after that introductory period is over? If you do not pay off the credit card within that introductory phase, you are likely to pay more than you are now in APR with the new card. If not, then this is an ideal choice.

3.Determine the credit limits. When applying for a credit card of any type, you need to consider if the credit limit meets your needs. If you are considering balance transfer credit cards, if they do not offer you a sufficient credit limit when you need to make the move, then it is worthless to you. But, in most cases, during your application phase the credit card company will ask if you are considering this feature. If so, then tell them how much you are looking to use a balance transfer for. It will not guarantee a higher credit limit, but it can’t hurt to request it for that specific purpose.

Taking the time necessary to determine just what it is that you need, what it will cost you and who can offer you the best deal is what you would do for any purchase. Therefore, when considering a balance transfer credit card, your goal is the same. Take the time to analyze your needs. Determine which balance transfer credit cards are capable of providing you with the interest rates and credit and balance transfer limits that you need. Determine what it will cost you in the long term as well in order to determine if it is the best product for you. Then, select the most suitable balance transfers option that fits your needs.

When you follow this plan, you will find benefit and reward in balance transfers. If you do not use it, you may find yourself paying more and saving less than you originally intended.

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Best Credit Card For Balance Transfer With 0% APR Offers

These Credit Card For Transferring Up To ,000 Balances

There is an interesting point about the best balance transfer credit card offers with 0% APR is that you get away with no interest payments on balance transfers for a certain period of time. Depending on the offer itself or your current FICO ratings, this can range from three months to even an entire year. Such deals can be used by financially astute individuals in two different ways. Firstly, you can save quite a lot of money over interest fees if you have a lot of unpaid balances on your current account due to existing cash advance borrowing or shopping purchases. At an average of 24% APR for most bad credit visa credit cards, you can save over 00 if your outstanding balances are almost K. The second approach people used to make use of zero interest balance transfer credit card is lesser known, and that is to make money rather easily and yet remains legitimate.

To use 0 balance transfer cards on introductory promotions for avoiding unnecessary interest charges on your existing credit card loans, you just need to transfer these balances (which usually must be from another bank) to this new bank card account. After you have done that, any surplus disposable income you have remaining san necessity expenses can be used to pay down the loan principal balance, rather than wasting it on interest repayment without helping to reduce your debts at all.

0% Balance Transfer Cards Advantages

Best Credit Card For Balance Transfer With 0% APR Offers83
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Save Money With Free Balance Transfers
Credit Card For Transferring Up To ,000 Balances
The most interesting point about the best balance transfer credit card offers with 0% APR is that you get away with no interest payments on balance transfers for a certain period of time. Depending on the offer itself or your current FICO ratings, this can range from three months to even an entire year. Such deals can be used by financially astute individuals in two different ways. Firstly, you can save quite a lot of money over interest fees if you have a lot of unpaid balances on your current account due to existing cash advance borrowing or shopping purchases. At an average of 24% APR for most bad credit visa credit cards, you can save over 00 if your outstanding balances are almost K. The second approach people used to make use of zero interest balance transfer credit card is lesser known, and that is to make money rather easily and yet remains legitimate.

To use 0 balance transfer cards on introductory promotions for avoiding unnecessary interest charges on your existing credit card loans, you just need to transfer these balances (which usually must be from another bank) to this new bank card account. After you have done that, any surplus disposable income you have remaining san necessity expenses can be used to pay down the loan principal balance, rather than wasting it on interest repayment without helping to reduce your debts at all.

0% Balance Transfer Cards Advantages

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Important Information About Using Credit Cards Online

With the invention of the internet, plenty of virtual shops and e-shops arrived which are available only on the internet. As the shops are virtually exists, the money should be virtual too. For this reason the credit card issuers have made it possible to purchase a thing from these online shops using their credit cards. The payment approval system of an online store can help you a lot for purchasing something. The purchased product will be delivered at your residence only after confirming your credit card payment. You can enjoy the convenience of shopping from sitting in front of your computer. As more and more online shops are developing everyday, the usage of credit cards online is getting more popular than ever. By enabling online payment through credit cards has conveyed a new approach of shopping for both the credit card holders and merchants.

You don’t have to worry about traffic jams, weather or other obscurities if you choose an online store for purchasing your necessary items. After completing an accepted payment through online, all you have to do is to wait for the delivery at your home. But using credit card online has also some demerits like almost anything else and one of the most important of them is the probability of credit card fraud. There are usually two ways of credit card fraud. The first one is concerned with the merchant that you are going to purchase a product online. The merchant may be fake that receives your credit card payment but deliver no items to you. They could also gather your credit card information that you have put on the payment form and use them for bad purposes. The second category of fraud is more dangerous which is committed by professional hackers. They intercept the details of your online credit card by using technology and spyware software. These kinds of programs are able to capture keystrokes or screenshots of your computer and send them to the spy. But don’t worry. You can protect this kind of online fraud easily by using anti-spyware programs designed to oppose the efficiency of spyware.

Using credit cards online is a very useful option of purchasing for both consumers and sellers. But you have to be careful when paying online through your credit card. Don’t make an online payment or access you bank account from internet cafes until you are absolutely sure about their activities.

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Let?s Stop Paying Annual Credit Card Fees

No annual fee credit cards offer some of the best credit card deals around. Plus, you should know, when you examine credit cards online you’ll discover that nowadays the best credit cards with no annual fees are widely available whatever your credit history is and most credit cards with no annual fee are instant approval credit cards.

Credit car companies use the annual fee to make up for savings on other fees. For instance, some card companies offer low interest rates, but charge a higher annual fee. Some credit card companies may waive the annual fee for a certain amount of time or raise interest rates to make up for the loss of the annual fee. It is important to remember that credit card companies issue credit cards with the purpose of making money through finance charges and/or annual fees.

Typically, no annual fee credit cards will have higher interest rates than cards that charge an annual fee. So, a person should consider the duration of the no annual fee offer, and how much the annual fee will be once the no annual fee time period expires. People should also understand their own spending habits, if they want to get the most from their no annual fee credit cards.

Many people consider no annual fee credit cards as a great deal. Credit cards with no annual fee imply no charge for annual servicing of the card. That means no annual fee credit cards allow purchasing without paying for using the best credit cards. If you want a no annual fee credit card, you should compare a variety of no annual fee credit cards so that you can find the best deals.

No fee credit cards may also be found among the best balance transfer credit cards, the best frequent flyer credit cards, the best gas credit cards, hotel credit cards, credit cards with cash back, etc. If you choose no annual fee credit cards from the best offers credit cards and apply online for a credit card, you’ll surely appreciate the utility of credit cards with no annual fees which provide cash back bonus, cash rebates, air miles and other rewards. Many people are now looking for these low and no annual fee credit cards because they are starting to catch on to how valuable these cards are. No annual fee credit cards are also important to people who have no or bad credit since among the whole variety of credit card deals on the Internet fee free credit cards are most attractive for customers with bad credit or poor credit as they try to rebuild their credit history. However, fee free credit cards with rates below 10% require an excellent credit history or above average credit risk score. Credit card deals with no annual fee are very lucrative but remember to study all the credit card deal terms and don’t forget the terms may change.

No annual fee credit cards basically offer a person a free credit card. So, as you study credit cards online, consider the benefit of credit cards having no annual fee and choose to get a credit card with no annual fees or several no annual fee credit cards.

Preventing Credit Card Application Scams- Answered

Filling up the online credit card application form is the first baby step, as well as a giant one, towards getting a credit card. If you take the online route, you save yourself days of waiting, as well as tons of effort. However, this alone is not the main reason why you should opt for the online mode.

The credit card industry is a fiercely competitive one. With about a dozen card issuing company, tens and thousands of affiliate sellers, hundreds of card options and millions of existing as well as probable customers- the industry is as competitive as it can possibly get. Another feature that makes this industry a tough one is the fact that the customers are informed, knowledgeable and have a rational thinking process.

Today, credit card industry is a matured one, with most of the customers being repeat ones. Given all these factors, card issuing companies are going all out to win over prospective customers. One of the most commonly used marketing strategies to win over customers is to introduce card offers for niche segments, catering to a specific segment of customers.

Examples of niche marketing will be cards for students, cards for buying gas, air tickets, groceries etc. Special cards were also introduced aimed at people with various statures, like cards for people with bad or no credit, cards for students, for tenants etc. Given such a plethora of offers, picking up the best card is often a tedious job – a job that requires gathering information about all offers, comparing and evaluating them, and then deciding on the best fit offer.

Online credit card application forms are generally accompanied by a goldmine of information. As a rational customer, it is your duty to settle on a given offer only after you have thoroughly evaluated and compared other competitive offers. And, the World Wide Web is the best possible platform where you can source and analyze all the information you want.

However, while scouting for information on the Internet, chances are that you will stumble across affiliate sites. Affiliate sites are intermediary marketing firms that act as an interface between the card issuing companies and the prospective customer. These sites act as a great source of information, and a one stop solution for all your card needs.

However, it is to be clearly understood that these sites are just intermediaries and in no way are they allowed to ask for any confidential information like SSN or any other such details. If you come across an intermediary file that is asking for these details from you, understand that they are malicious in nature and take no time in leaving that site.

The Internet is a tool that has changed our life beyond imagination. And it has changed both for worse and for better. While intermediary sites have our life easier, malicious sites have succeeded time and again in scamming people. However, it will be better idea to apply common security measures rather than shunning the net. In a nutshell, embrace technology and use the online credit card application form when needed.

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