Most people have credit cards these days, and you probably have one too. They’re great tools if you know how to use them, but they also add debt. That means you get interest charges on top of whatever you originally spent.

 We’ll run you through the secrets of credit card interest rates so you can make the best possible decisions to keep debt manageable.

 Q: What is APR?

 A: APR means “Annual Percentage Rate,” and it sums up the yearly cost of having a credit card. It includes interest, fees and any other costs related to the card. You can use the APR number to easily see which financial institutions offer the best rates.

 Many institutions offer starting rates of 17% or 18%, but these can get as high as 27% or more. That’s high! Luckily, you’re not always stuck with a bad rate.

 Don’t be afraid to call your institution and negotiate your rate down or look for a different credit card somewhere else. For instance, our credit card rate has a variable rate as low as 9.90% APR, which is nearly half the national average credit card rate.

 Q: How does credit card interest work?

 A: Credit card interest is added to whatever balance you leave on the card. For example, a $200 balance at 17% APR would give you a roughly $2.83 monthly interest charge if you did not pay anything on the balance.

 If you pay off your balance in full each month, you won’t have interest charges. If you only pay the minimum payment each month, expect to see interest charges added to your normal balance.

 Q: What are the risks?

 A: Credit cards have some risks when it comes to interest rates:

·         Making only the minimum payment causes interest to add up over time

·         The larger your debt grows, the higher your interest charge will be as well

·         Your credit card bill can slowly spiral out of control if you only make the minimum payment each month

 We recommend paying more than the minimum to keep the credit card affordable in the long term. To make it even more affordable, you should also find a great starting APR. Get a low-APR Allied credit card to keep your bill under control and avoid paying more than you should.