Home > Credit Cards > What You Should Know About “Introductory” APRs

Comments 0 Comments

An introductory interest rate is often called a “teaser” rate. The promise of 0% interest for a period of time can be very enticing and might “tease” you into applying for the card.

A lot of cards these days offer introductory APRs. Some credit cards are even offering them on both purchases and balance transfers. When considering these offers, you need to pay close attention to two things: the length of the offer and the “go-to” rate. The go-to rate is the APR you’ll be paying after the intro period ends.

[Related Resource:The Best Travel Credit Cards of 2017]

I think an example always helps, so let’s take a look at a card that has a good intro APR offer: The Citi Platinum Select MasterCard. The credit card agreement (specifically, the rates and fees located inside the Schumer Box) shows that you get a zero percent introductory APR for 21 months. After that, your APR will be 11.99 percent, 16.99 percent or 20.99 percent (V) APR, depending on your creditworthiness. You get these same terms for a balance transfer.

Okay, so you now know how long your intro rate is and that you’ll get a go-to rate of 11.99 percent, 16.99 percent or 20.99 percent (V) APR. Mark the date that your intro rate ends on your calendar so you aren’t taken by surprise if you revolve a balance after the intro rate ends. It would be a bummer to buy a $1,200 HDTV with your card and find out later that you’re paying a (V) APR of 20.99 percent on the purchase. The length of the intro period varies by card, so read the terms and conditions carefully. Most of the intro APRs I’ve seen recently range from six months to 24 months.

These introductory APRs can be a great way to save money. But it’s essential that you make timely payments or you might get stuck with a penalty rate that’s often as high as 29.99 percent.  In many credit cards’ terms and conditions, I frequently see a note like this: We may end your introductory APR and apply the Penalty APR if you make a late payment.

That sounds as if the issuer can slap you with the penalty rate if your payment is a day late, doesn’t it? The Credit CARD Act of 2009 specifically prohibits an interest rate increase unless you’re more than 60 days late with a payment. There was some question about whether the law included intro rates. Thankfully, the the Federal Reserve recently confirmed that introductory rates are covered by the CARD Act.

[Related article: Fed Closes More CARD Act Loopholes ]

So if you’re late with your minimum payment but you pay it within 60 days, the issuer can’t take away your intro rate. If you think you’ve unfairly lost your promotional rate, call your issuer.

Image: Andres Rueda, via Flickr

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other sponsored content on Credit.com are Partners with Credit.com. Credit.com receives compensation if our users apply for and ultimately sign up for any financial products or cards offered.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team