APR vs Interest rate

[Anonymous]

Someone Please explain this to me the best way possible . I never really gave much thought to Interest rates and APR ,because for the 2 years I have owned credit cards I Have always planned and succeeded in paying off the balance before Interest could even ever hit . Unfortunately I need to buy furniture for a new apartment and Don't have the funds so I will be using my Credit card and will probably take me 3-4months to pay off. Thus I will need to finally face that dreaded I word known as Interest. Now! me being young and naive I believe I had the idea of how it works all wrong. for example the card I am going to be using has an APR of 14.9 . I always believed and it maybe true? that the 14.9 APR is the interest I pay monthly on the balance? But I did a little research which was jumbled and not very easy to understand that suggest 14.9 is my Yearly interest rate on a balance ? and the actual Monthly rate is much less? can someone PLEASE shed some light on this.

[Anonymous]

Welcome to the board. APR can be little confusing as you are not charged once a year on the card.  Interest is charged daily by these companies and that is known as the DPR meaning Daily Percentage Rate.

How do you get the DPR?  Based on your post, it is going to be;

APR of [14.90% / 365 (days in a year)] = DPR.  Although the number might seem little thus the DPR, it adds up.  Hope this helps.

[Anonymous]

Thank you so much for clearing that up. And the [DPR x Days in Month] =Monthly Interest Roughly? Or am I way off?

[Anonymous]

---

@Anonymous wrote:
Thank you so much for clearing that up. And the [DPR /Days in Month] =Monthly Interest Roughly? Or am I way off?

---

You are not way off.  You can look at it that way as long as you are doing the math daily.

[longtimelurker]

---

@Anonymous wrote:

 But I did a little research which was jumbled and not very easy to understand that suggest 14.9 is my Yearly interest rate on a balance ? 

---

Looks like the question has been answered, but you should know that the "A" in "APR" is "Annual"  (Annual Percentage Rate so it is a yearly rate)

[Anonymous]

Not sure of your credit situation and where you might be buying the furniture, but if possible many of these stores have a 0% option financed over 12,18,24 with deferred interest. They are normally easy to qualify for and as long as you pay off the entire balance at least 1 month prior to the promo expiring life is good...

[Anonymous]

I appreciate the helpful input. Where im shopping has a store credit card offering such . However I have 4 recent inquires in this month alone 2 approved and 2 declined So im planning to cool it for awhile. my scores are mid 600s and Im really aiming for that 700 mark . I got aprroved for Navy Federal Credit Union which is the card im going to use for purchase. and a Chase Freedom Unlimited  but the CL on that is only $500 haha oh chase. I was declined for AMEX everyday blue which i really wanted and Discover it which I was upset because they emailed me the offer and i prequalifed on the website before applying but it is what it is. I'll keep building an try again for Amex which I really want in my line up later.