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Home / Questions / Interest Rates and Interest Charges Annual Percentage Rate (APR)for Purchases 0% intro A

Interest Rates and Interest Charges Annual Percentage Rate (APR)for Purchases 0% intro A

Interest Rates and Interest Charges

Annual Percentage Rate (APR)for Purchases

0% intro APR for 12months from date of account opening.

After the intro APR expires, your APRwill be 11.24% to23.24%, based onyour creditworthiness. This APR will vary with the market based onthe Prime Rate.

APR for BalanceTransfers

0% intro APR for 12months from date of first transfer, for transfers under this offerthat post to your account by May 10, 2016.

After the intro APR expires, your APRwill be 11.24% to 23.24%, basedon your creditworthiness. This APR will vary with the market basedon the Prime Rate.

APR for CashAdvances


This APR will vary with the marketbased on the Prime Rate.

Penalty APR and When ItApplies


How to Avoid Paying Interest onPurchases

Your due date is at least 25 days afterthe close of each billing period (at least 23 days for billingperiods that begin in February). We will not charge you anyinterest on purchases if you pay your entire balance by the duedate each month.

Minimum InterestCharge

If you are charged interest, the chargewill be no less than $.50.

For Credit Card Tips from theConsumer Financial Protection Bureau

To learn more about factors to considerwhen applying for or using a credit card, visit the website of theConsumer Financial Protection Bureauat




Set-up and MaintenanceFees

Annual Fee


Transaction Fees


Balance Transfer

3% of the amount of each transfer .

Cash Advance

Either $10 or 5% of the amountof each cash advance, whichever is greater.

Penalty Fees


Late Payment

None the first time you pay late. After that,up to $35.

Returned Payment

Up to $35.


HOW WE WILL CALCULATE YOUR BALANCE: We use amethod called "daily balance (including new purchases)."

HOW WE CALCULATE AND DETERMINE RATES: Wecalculate variable rates based on the Prime Rate by using thehighest U.S. Prime Rate listed in The Wall Street Journalon the last business day of the month. For the purchase APR, we addfrom 7.74% to 19.74% to the Prime Rate based on yourcreditworthiness. When we evaluate creditworthiness, we consideryour credit report, all the information you provided and otherinformation. Customers with the best credit profiles receive thelowest rate. Other customers receive higher rates and may beoffered an account with different rates or terms, including nointroductory rates but the same cash back rewards offer. For thecash advance APR, we add 21.74% to the Prime Rate.

BALANCE TRANSFERS: This offer applies tobalance transfers that post to your account by 5/10/2016. It takesat least 14 days after your account is opened to process paymentsto your other accounts. You may cancel a balance transfer at anytime prior to that by calling 1-800-347-3085 . Continue to make allrequired payments to your other accounts until you confirm that thebalance transfers were made. Balance transfers may not be used topay any Discover accounts and do not earn rewards. You may transferany amount, up to your credit available for transfers, which may beless than your total credit line. If your balance transfer requestwill exceed your available credit, we will process your transfersfor less than the amount requested, in the order requested. You mayonly make balance transfers to accounts that list you as anaccountholder. The minimum payment requirement can causepromotional balances to be paid in full prior to the end of thepromotional period. There is no grace period on yourbalance transfers. If you take advantage of this balance transferoffer, you will be charged interest on purchases unless yourpurchase APR is at a promotional 0% APR. To avoid interest on newpurchases after you transfer a balance, you must pay all balanceson your account, including any balances you transfer under thisoffer, in full by the first payment due date. See yourCardmember Agreement for details.

PAYMENT ALLOCATION: We apply payments andcredits at our discretion, including in a manner most favorable orconvenient for us. Each billing period, we will generally applyamounts you pay that exceed the minimum payment due to balanceswith higher APRs before balances with lower APRs as of the date wecredit your payment.

APPLICATION INFORMATION: Federal law requires that weobtain certain information about you such as your date of birth andstreet address in order to verify your identity. Youauthorize us to receive and exchange information about you,including from your employer, your bank, credit bureaus and othersfor purposes of verifying your identity and the information on thisapplication and determining your eligibility for credit, renewal ofcredit, and future extensions of credit. By providing your phonenumbers, you agree that Discover, its affiliates and agents, maycall you at these numbers. If this is a cell phone number you agreethat we may contact you using an automatic dialer, includingpre-recorded messages and/or text messages, even if your cell phoneprovider may charge you for calls according to your current plan.Upon your request, we will inform you of the name and address ofeach consumer reporting agency from which we obtained a consumerreport relating to you. Offer only available to U.S. residents 18and older. Every applicant, regardless of marital status, can applyfor a separate account. THIS OFFER SUPERSEDES ALL PRIOR OFFERS.Terms of this offer, including fees and calculations of variablerates, are accurate as of January 29, 2016, and may change afterthat date. To find out what may have changed after that date, writeto us at PO Box 15410, Wilmington, DE 19850-5410. Please allow 30days for us to process your application.

CREDIT LINE: Applicants may not request aspecific credit line. If you are approved, your credit line will beat least $500 and along with other terms of the account, will bebased on a review of the information you provide in thisapplication and your consumer report; it may also include otherinformation we may have bearing on your creditworthiness. Balancetransfers made with an application are not considered to be arequest for a particular credit line.

CARDMEMBER AGREEMENT: You will receive aCardmember Agreement with the Card. You agree that the CardmemberAgreement and the account are governed by Delaware and federal law.The terms of your account, including rates and fees, are subject tochange, to the extent permitted by law.ARBITRATION: The Cardmember Agreement providesthat we may choose to resolve a claim relating to your account bybinding arbitration, in which case, you will not have the right tohave that claim resolved by a judge or jury and you will not havethe right to participate in a class action in court or arbitration.You may reject the arbitration provision with respect to your newaccount within 30 days after receiving your Card. OhioResidents: Ohio laws against discrimination require thatall creditors make credit equally available to all creditworthycustomers, and that credit reporting agencies maintain separatecredit histories on each individual upon request. The Ohio CivilRights Commission administers compliance with this law. NewYork Residents: For more information call us at1-800-347-3085. You may contact the New York State Department ofFinancial Services at 1-800-342-3736 or visit forfree information on comparative credit card rates, fees and graceperiods. Wisconsin Residents: No agreement, courtorder or individual statement applying to marital property willadversely affect a creditor's interests unless prior to the timecredit is granted the creditor is furnished with a copy of theagreement, court order or statement, or has actual knowledge of theadverse provision. Married Wisconsin residents must furnish theirspouse's name and address to us at PO Box 15410, Wilmington, DE19850-5410.

REWARDS: We will send you full terms andconditions with your card. You can redeem rewards in any amount atany time. Rewards never expire. We will credit your account withyour Cashback Bonus balance if your account is closed orif you have not used your account within 18 months.

You may redeem your Cashback Bonus in any amount startingwith 1 cent for a credit to your account, an electronic deposit toyour bank account, a donation to select charities, or to pay withCashback Bonus at select online retailers. Starting with$20, you may redeem for gift cards or instant eCertificates fromour Partners or for Discover gift cards.

It is your responsibility to notify us in the event you do notreceive a reward. Redemption may not be available for approximately24-48 hours if your card is lost or stolen.

You have the opportunity to earn a full 5% Cashback Bonuson purchases made at select merchants or in certain merchantcategories that change throughout the year up to the quarterlymaximum. You must sign up for each quarterly program. The amount ofthe cap may change. Click here to see the current 5% programdetails.

You will not earn Cashback Bonus on cash advances, balancetransfers, illegal transactions or on any cash you receive inconnection with a purchase at the point of sale through our CashOver feature. For full details about your rewards, call1-800-347-3085.

FICO Credit Score Terms: Your FICO®Credit Score and key factors are based on data from TransUnion andmay be different from other credit scores. This information isintended for and only provided to Primary cardmembers who have anavailable score. See about the availability ofyour score. Your score is provided on the statement for individualaccounts and on with key factors for individual andjoint accounts. You will see up to a year of recent scores startingwhen you become a cardmember. Discover and other lenders may usedifferent inputs, such as a FICO® Credit Score, othercredit scores and more information in credit decisions. Thisbenefit may change or end in the future. FICO is a registeredtrademark of the Fair Isaac Corporation in the United States andother countries.

Double First Year Cash Back: After the first 12consecutive billing periods that your new account is open, we willdouble all the cash back rewards you've earned and apply them toyour account in the following one or two billing cycles. You'veearned rewards when they have posted to your account by the end ofthe 12th consecutive billing period. You will not receive DoubleCash Back if your account is closed or no longer in the cash backreward program as of the award date. This promotional offer may notbe offered in the future. This exclusive offer is available only tonew cardmembers.

OVERNIGHT SHIPPING: Overnight shipping is notavailable to P.O. boxes or addresses outside the U.S. Carrierovernight shipping limitations apply that may impact the exactdelivery date.

Freeze It: When you freeze your account, Discoverwill not authorize new purchases, cash advances or balancetransfers. However, some activity will continue, including billsthat merchants mark as recurring, as well as returns, credits,dispute adjustments, payments, Discover protection product fees,other account fees, interest, rewards redemptions and certain otherexempted transactions.

1. How many different possiblerates could you be charged according to the contract?

2. Assuming that the interest is compounded daily, what is theeffective annual rate for each APR given?

3. If the prime rate changes to 4.3%, what is the EAR that youwould have to pay under normal circumstances?

4. If you purchase an item for $100 and are charged the regularrate for one year (assume that you don’t make payments but that youalso do not incur any other charges) what will you owe?

5. If you purchase an item for $100 and are charged the penaltyrate for one year without making any payments, what will youowe?

6. If you take a cash advance of $100 and don’t pay it off forone year, what will you owe?


Dec 04 2019 View more View Less

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