APR (annual percentage rate) is typically one of the key factors people look for when choosing a credit card as a higher rate can mean higher payments each month and more debt being incurred. However, there's more involved in determining the amount you'll pay than just looking at a card's standard APR, as different rates may be charged for different types of transactions.

If you are confident that you will be able to pay off your credit card balance in full each month, APR may be irrelevant, as this only refers to the amount of interest charged on an outstanding balance. However, it still makes financial sense to be prepared for all eventualities, and many credit card providers offer very competitive APRs to attract and retain customers.

It's important to read the terms and conditions of your credit card before applying, as relying on promotional material alone could give you the wrong idea. If you see a particularly low APR being advertised, it may be the case that this is only an introductory rate that applies for a limited period, and this might not be so beneficial if you're looking for a credit card for the long term. There can also be differences between introductory rates and promotional rates, with the latter often applying to balances transferred between cards.

You should also consider the type of transactions you are likely to use your credit card for, as these can carry different APRs. Some activities tend to charge a higher APR than others, such as cash advances, while retail purchases are usually lower. The more financial risk is associated with a transaction on behalf of the credit card company, the higher the APR you will usually pay.

Even if you see a low APR advertised by a credit card company, you may not necessarily benefit from this rate yourself, as APR is also often based on personal credit history. If you have a low credit score, credit card companies may feel you are at higher risk of incurring debt and charge a higher APR, or reject your claim to apply for certain types of credit cards aimed at people with high credit scores who are more likely to make repayments on schedule.

You should also be aware that APR does not always reflect any fees or other charges that may be involved when using your credit card. Some card providers include annual fees and other costs in the APR, while others do not.

The author of this article is a part of a digital marketing agency that works with brands like Barclaycard. The content contained in this article is for information purposes only and should not be used to make any financial decisions.