For many people, credit cards boil down to two things: monthly payments and credit limits. While this is fine if you pay off your balance in full each month, most of us end up paying only the minimum payment. Unfortunately, this results in much more significant payments over the term of your debt. The APR, or annual percentage rate, is a measure of the interest paid over the full term of the loan. Here's what you need to know about variable APRs and how they apply to Capital One's selection of credit cards.
The lower the APR, the less you'll have to pay over time. In many cases, the APR you qualify for will be based on your credit rating and a host of other factors. Sometimes companies restrict their APRs to upper and lower ranges, limiting the rates you can qualify for. A variable APR differs slightly from a fixed APR. While a fixed APR is set at a given rate, a variable APR can fluctuate according to an index. The index APR is based caries by card issuer. It might be the Standard & Poor 500, the prime rate published in the Wall Street Journal or any number of potential others.
So why do variable APRs exist?
They can be a gamble for those with higher credit scores. While the economy is good, your interest rate might be significantly lower. And as the economy changes, the APR may also change. The could similarly fluctuate according to the performance of the company the index is based on. The APR is how a credit card issuer makes money so that they can continue funding additional lines of credit for more people like you. After all, the financial industry is a thriving and lucrative one that operates on a for profit basis. Capital One is not differnt in that aspect. However, there are some things to consider with vairable APRs and Capital One cards.
APRs With Capital One
What are the best APR offers on Capital One cards?
Capital One offers pretty standard APRs across the board for their cards, but one in particular stands out: the VentureOne Rewards Card. The VentureOne Rewards Card has the lowest potential rate of any card offered by Capital One, provided you have the credit score to get approved for a low rate. The Venture Rewards Card and the Quicksilver Rewards Card are close seconds.
How do Capital One APRs differ from other cards?
As mentioned above, with its potential for below average APR, the VentureOne Rewards Card may be the lowest APR offer from Capital One. Other cards like the Citi Diamond Preferred Card and BankAmericard Credit Card offer comparable rates within a percentage point for people with good or excellent credit. But a percentage point difference can still cost you hundreds of dollars.
What benefits are there with the Capital One introductory APR credit cards?
Capital One only has two cards with an introductory APR offer, and those are Quicksilver Cash Rewards Card and the VentureOne Rewards Card. A low or no intro APR can offer relief during the specified period on purchases and balance transfers. Since the APR offer extends to balance transfers on the Quicksilver Cash Rewards Card, its one of the best balance transfer cards available from Capital One.
Adding to its benefits, the Quicksilver also offers cashback on all purchases, as well as a one time cash bonus if you spend a small amount on the card within the first few months of owning it. The VentureOne card, however, is geared toward travel, offering bonus miles on every dollar spent. It boasts as a no annual fee card, which is rare for travel cards. If you have a great credit score, strong wanderlust and no balance to transfer, the VentureOne Rewards card may be the one for you with its low APR potential and travel benefits.
Rates, Fees and What to Know Before Applying
What is the minimum credit score one should have before applying for a Capital One low APR card?
The majority of rewards credit cards require at least an excellent credit score to qualify. This means your credit score should be 720 or higher. Both the Venture Rewards Card and the Quicksilver Cash Rewards Card require Excellent credit. While it may be possible to qualify for either of these cards with a lower credit rating in extenuating circumstances, you won't likely qualify for the lowest possible APR unless your rating is Excellent or higher.
What are the other fees associated with Capital One's introductory APR card(s)? e.g. Annual fee, Late fee, Foreign transaction fee, etc.
The VentureOne Rewards Card provides introductory APR incentives for a period, and then the rate falls somewhere in a standard range depending on your creditworthiness.
Cash advances are available with this card, but at a much higher APR than average. And fees apply also. In addition to fees for cash advances, there's a missed payment fee for every payment that extends past the due date. As with ant credit card, if someone who misuses uses their Capital One cards, when fees and APR considerations are assessed it can be costly.
If you're looking for a card with a lower APR, it's hard to go wrong with the VentureOne Rewards Card. If you're a frequent traveler, it's even better; the added benefits of the miles you'll earn with each purchase make it a no brainer. On the other hand, if you dislike traveling or just have no real use for it, the Quicksilver Cash Rewards card might be the better option. While its APR is slightly higher, it carries many of the same benefits and the rewards you'll earn will balance out the slight difference in APR.
Just keep an eye on your balance; as long as it remains low, the difference between the two cards will be negligible. Take a look at the two and use Capital One's comparison feature to decide which of the options is best for you.