Millions of adults in the United Kingdom use a credit card, either as part of their regular spending or for emergency use. All credit cards come with something called the annual percentage rate (APR), which helps you determine how much interest you have to pay on purchases. But exactly how does credit card interest work?
One thing to keep in mind is that if you pay off your credit card balance in full every month, you won’t have to pay any interest on your purchases. This makes this payment option attractive to many people. Other people, however, take advantage of the ability to make a smaller payment on their credit card balance – your credit card lender sets a minimum payment that you need to make each month and, as long as you stay within your credit limit and make this payment, you can pay off what you owe over a period of time.
Something to be aware of here is that this is when the APR kicks in: if you spread out your payments on your credit card rather than paying it off at the end of every month, you will start to be charged interest by your credit card company. Thi (…)
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