GUIDES
How to Manage Your Credit Card APR and Save Money
LAST EDITED BY PRANAV KARNAD ON APRIL 23, 2025.
- Type of Credit Card APR
- The Calculation Process of Credit Card APR
- Tips to Maintain the Credit Card APR At Its Lowest Value
- Conclusion
- Frequently Asked Questions
APR mainly stands for the Annual Percentage Rate. So, it is basically the interest rate on your credit card referred to as an annual rate. You need to pay it to further carry the balance in your credit card. But, the credit card APR changes over time, meaning the rate can either go up or down. Hence, you have to clear all your outstanding dues every month to ignore paying the APR on your credit card. However, the article, here, will further discuss APR types, and the process to calculate it.
Type of Credit Card APR
The credit cardholders must be aware of the fact that there are different types of APR credit cards. Here are the categories:
Purchase APR
This APR is typically associated with purchases made on credit cards, where the interest you pay is based on the money you spend. Your purchase will be subject to an interest rate for groceries, clothing, entertainment, or other expenses.
Cash Advance APR
This APR is typically associated with purchases made on credit cards, where the interest you pay is based on the money you spend. Your purchase will be subject to an interest rate for groceries, clothing, entertainment, or other expenses.
Balance Transfer APR
Any balances transferred from one card to another will be subject to the APR. Unlike the purchase APR, there is no period for the balance transfer APR where interest does not accrue. The APR for purchases and balance transfer may be the same, but the card issuer should verify it before the transfer.
Penalty APR
If you make a payment late or miss a payment, you may be charged a penalty APR, which can eliminate any introductory offers you may have received. Additionally, this can impact your credit score and may even cause the penalty APR to remain on your account if you regularly miss payments.
The Calculation Process of Credit Card APR
Below is the process to calculate the credit card APR:
- The interest APR can be divided by 365 to yield a daily rate.
- Calculating the Average Daily Balance is the next step of the calculation. You need to divide the total of the balances from every statement and divide it by the number of days.
- To calculate the monthly finance charge, divide the annual percentage rate by 365 days by your average daily balance and the number of days in your payment cycle. You can easily check and calculate on the credit card app.
Tips to Maintain the Credit Card APR At Its Lowest Value
Here are some tips for maintaining the lowest possible APR credit card.
- Having a credit card makes it essential to maintain a good credit rating. It will improve your chances of obtaining a favorable Annual Percentage Rate (APR) when you apply for a new card.
- The balance will accumulate interest when you pay the minimum amount due on your credit card. Pay off the full balance before the due date to avoid being charged interest.
- If you possess multiple credit cards, you can transfer the balance to the one that offers a low annual percentage rate. Doing this can also help boost your credit score.
Conclusion
In conclusion, understanding your credit card APR and its different types is crucial to avoiding unnecessary charges and maintaining good credit health. Remember to always pay your balances in full and on time, and if you're looking for a credit card that offers great rewards, consider checking out the Fi-Federal co-branded Credit Card. Not only does it give you a 2% valueback through rewards, but you also get to earn Fi Coins, our very own reward system, and enjoy a range of travel perks. So go ahead and make informed financial decisions with the Fi-Federal co-branded Credit Card in hand !
Frequently Asked Questions
Is there any way to reduce the APR?
Clearing all the card dues and making the payments timely will help the cardholders to lower the APR. Also, you must have a good credit score and history to avoid paying the APR.
How much is the penalty APR?
Well, if you do not pay the outstanding dues for two months, your lender will impose a penalty APR. They will calculate it depending on the total outstanding.
Products on our platform | Details |
|---|---|
Unified Payments Interface (UPI) | Epifi Technologies Pvt. Ltd ('Epifi Tech') is a Third-Party App Provider ('TPAP') - and acts as a service provider and participates in UPI through a Payment Service Provider ('PSP') Bank (Federal Bank). |
Savings Account and Deposits | Federal Bank offers savings account, fixed deposits and smart deposits to users on the Fi App (through Epifi Tech). Users' savings account and deposits are securely opened with Federal Bank. |
Cards | Fi Brand Pvt. Ltd. markets and distributes co-branded cards in partnership with Federal Bank and Visa. Cards are issued by Federal Bank. |
Loans | Epifi Tech facilitates loan distribution and acts as a lending service provider and/or digital lending application for various Banks, registered NBFCs and NBFC-P2P ('Lenders') List of Lenders. |
Mutual Funds | Epifi Wealth Pvt. Ltd. ('Epifi Wealth') is a registered investment adviser and provides a platform for mutual funds investment. Epifi Wealth has partnered with MFCentral to provide mutual funds analyser to users. |
Loans Against Mutual Funds | Epifi Tech in partnership with regulated entities including Epifi Wealth and Bajaj Finserv provides a platform for loans against mutual funds. |
US Stocks | Epifi Tech has partnered with US stock broker Alpaca Securities LLC to provide users the option to invest in US stocks. |
Connected Accounts | Epifi Wealth (as a financial information user), in partnership with Finvu and Onemoney, provides users the option to link their existing financial accounts on Fi. |
Credit Analyser | Epifi Tech (as a non-specified user) in partnership with Experian and CIBIL provides insights on users' credit scores |
Fi-Coins | Fi-Coins are earned under a reward programme for engaging with products and services on the Fi App. |
Fi Store | Fi-Coins can be redeemed on products and services listed on Fi Store such as merchandise, gift cards, air miles, among other things. |
Insights
1. Net Worth: Helps users get a view of their financial Net Worth — in accordance with their assets & liabilities
2. Wealth Maximiser: Analyses your finances, shares financial reports to make informed money decisions
These products are governed by our Terms and Conditions, Privacy Policy, and any other product and partner specific terms and conditions as communicated to you.
©epiFi Technologies Pvt. Ltd. 2025
Fi is a money management platform that offers the perfect solution for all your financial needs. The Federal Bank Savings Account offered through Fi is an online savings account that you can open in 3 minutes! It goes beyond online account opening, as it has helped reimagine the banking experience in India
Through Fi, you can do more: apply for an instant personal loan, pick from many types of Mutual Funds, select the best SIP to invest in US Stocks, apply for a forex-free Debit Card (works for select account plans) to use while travelling abroad, analyse/improve their portfolio, get a 360-degree view of your spend insights and take steps building wealth.
You can also utilise Fi's free personal loan resources, such as the Personal Loan and EMI calculator, before proceeding to the quick loan application process. All of this is why over 35 lakh Indians feel that Fi is the only financial app you will ever need.