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If you are planning to carry a large balance on your credit card, then you should choose Low APR. Why does it so? Because APR, acronym from Annual Percentage rate will give you guidance on how much the interest you have to pay as an additional charge from your loan.
<h3>Further explanation</h3>Interested to know more about this answer, let's take a look at our Brainly explanation below.
First, what is APR, APR is the acronym from Annual Percentage Rates. It's an entity from the credit that comes from your credit card. The formula of APR is listed below.
To give a clear view and explanation of what is APR, please take a look at data below. For example, Bob bought a new Macbook pro, that cost him 2500 USD in June 2017. He bought it by his credit card and he need to pay monthly the bill of credit card within 10 months. In middle of 2018, when he finished paid all the bill of his Macbook pro, he realize he paid 150 dollar of the interest. So the calculation of APR from his credit card is.
1. The cost of the product that you pay
The interest of the payment is 150 dollar.
2. Sum the number and divide by the loan amount
The percentage 150 dollar divided by 2500 dollar. It gives 0.06
3. Divide them by the day terms of the loan
The term of the loan is 10 months or 300 days. So It gives 0.06 / 300 = 0.0002
4. Multiply the result to 365 days
Follow it with 0.002 x 365 = 0.073
5. Multiply by 100 to get the amount in percentage
It gives 7.3
So the APR is 7.3 %
Below is also some of the reasons why you should not pick the other choice or feature.
<h3>Why the other choices are not relevant:</h3>B-Low balance transfer fee
Usually, people not using cash in regards to credit card usage. Why does it so, because credit card will give you extra charge to withdraw some money. It also applies to transfer fee, most of the bank provides a free transfer from one account to another account. Therefore low balance transfer is not aligned as the choice to pick a credit card.
C-Lots of credit card rewards
Credit card rewards are a gamification way of the credit card issuer and do you know that in the world only 10% of customers that are using it. It applies to the reward in another service, such as miles award and so on.
D-A large credit limit
The credit limit is entirely the right of the credit card issuer in deciding on how much the credit card should be issued. You can not just pick up the large credit limit without any approval from the institution that approves your credit limit.
Learn more
If you are interested more into this topic, we recommend you too also take a look at the following question.
- annual percentage rates by monthly: brainly.com/question/8970458
- annual percentage rate on mortgage : brainly.com/question/1398763
- how do annual percentage rates: work:brainly.com/question/1361627
Grade: 12
Subject: Economy
Subchapter: Loan