APR stands for Annual Percentage Rate, and it's the fixed percentage of interest that you must pay to the credit card company yearly in exchange for using their money.

In order to calculate your monthly periodic rate (the amount you must pay the credit card company every month whenever you fail to pay off the balance by the due date), all you need to do is divide your APR by 12.

On the other hand, if your credit card company charges you a monthly rate, then you would have to multiply that number by 12 in order to figure out your APR.

If you pay off the balance you owe at the end of every month, you can avoid having to pay your monthly periodic rate, since the credit card company only charges you monthly if you have failed to pay off your balance in full that month.

Do note that not all credit card companies charge a fixed interest; some credit card companies charge a variable interest rate instead, which is linked to general market interest rates.

Since 2010, there is only one way a credit card company can calculate your interest charges, and that is based on your average daily balance, including new purchases.

Save money by paying on time.

Remember: If you don't hold a balance, you don't pay any interest!

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