Should you be Concerned about Rising Credit Card Rates?
Posted on 2/8/2010 - Filed under Credit Card Rates
If you’re worried that the interest rate on your credit card will see a serious hike during 2010, you’re not alone. Many Americans are concerned about the new credit card laws that are currently being implemented. They’re wondering how credit card companies will react, and some experts are predicting that interest rates will go up.
This may indeed happen. The majority of credit cards currently being issued have a variable interest rate attached to them. This means that the rate, often referred to as the annual percentage rate (APR) for the card can change. It is often dependent on the prime rate.
The prime rate is currently very low, which means that there is a good chance it will go up during the next year. If this happens, the APR on credit cards with variable interest rates will increase as well. This means that your card could be affected.
While an increase in interest rates does not sound appealing, it may not harm your account at all. If you pay your balance off every month, you will see virtually no change. And if you do often carry a balance, now is the time to work on changing that. If you can pay your credit card bill in full every month, you’ll save hundreds of dollars on interest and enjoy other benefits as well.
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Variable vs. Fixed Rate: What’s the Difference when it comes to Credit Cards
Posted on 9/8/2009 - Filed under Credit Card Rates
Credit cards come with either a fixed or variable interest rate. This is known as their APR. If you’re not sure what your card offers, check the terms and conditions to find out.
So what’s the difference between variable and fixed rates?
Variable rates tend to fluctuate more easily than fixed rates. They are usually attached to other rates, such as the prime rate. When the prime rate goes up, so does your APR. And if it goes down, your variable interest rate also declines.
Take a card that has a variable APR. Let’s say the interest rate for it is set at the prime rate plus 9 percent. If the prime rate is 6 percent, your card will have a 15 percent APR (6 plus 9). If the prime rate falls to 3 percent, your APR will only be 12 percent (3 plus 9).
A fixed rate, on the other hand, is one that does not change as easily. Credit card companies have the right to change even a fixed APR, but they need to warn you in writing before they do so.
Some credit card issuers are now offering more variable than fixed rates. If you’re looking for a new card, keep the difference in mind as you shop. You’ll want to get an APR that meets your financial needs.
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Three Advantages of Low Interest Credit Cards
Posted on 5/3/2009 - Filed under Credit Card Rates
Is the interest rate on your current card too high?
Some credit card companies have recently raised the rates for their customers. If this has happened to you, or if you simply feel like the interest rate you have right now is more than you would like it to be, there’s good news. There are still cards available that have a lower interest rate.
Besides a kinder APR, you can usually find other advantages in a low interest credit card. Here are a few of the side benefits you can expect to receive when you apply for one:
You’ll save money. If you regularly carry a balance, the charges you’ll pay out in interest can add up fast. With a low interest rate on your card, you can end up saving a substantial amount of cash. You could save several hundred or even thousand dollars during the course of one year.
0% APR Introductory period. This is a nice benefit, and one that comes with many credit cards. In addition to having a regular low interest rate, you can start off without having any interest charged to your account when you make a purchase.
Additional benefits. Many low interest cards come with extra features, including rewards programs, the chance to transfer a balance, and much more. Look through the card’s terms and conditions to get a good idea of what all comes with the card. Then, if the interest rate is right, fill out an online application and get the card right away.
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Low Interest Rate Credit Cards: How Low Can You Go?
Posted on 1/11/2009 - Filed under Credit Card Rates
One of the most popular credit cards for consumers is the low interest rate credit card, and the reason is fairly obvious. With one of these cards, you can save quite a bit of money if you regularly carry a balance. Even if you don’t carry a balance, you might want to hold on to one in case of an emergency.
So how low do these cards go? Well, it varies from year to year, depending on many factors, including the economy and current rates suggested by the Federal Reserve. Currently, any card that has an APR of somewhere between 8 and 13 percent would probably be considered a good deal for a low interest rate credit card.
If you currently carry a balance, or know that you often do, this may be a smart choice for you. Low interest rate credit cards often offer other features in addition to the low APR, so you may end up with even more benefits than you first imagined in a card.
So if you are shopping for a new credit card, it may be wise to seriously consider a low interest rate card. It could save you hundreds of dollars if you carry a balance for a few months. And it could give you other benefits as well, making it a good deal overall.
Click Here To Compare Low Interest Credit Cards
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The Prime Rate and What it Means for your Credit Card
Posted on 9/3/2008 - Filed under Credit Card Rates
If the rate on your credit card seems to be constantly shifting, you're not alone. Your card, like many of today's credit cards, probably has a variable interest rate. Just what does the variable rate mean and where does it come from? More often than not, the variable rate on your card is determined by the prime rate. The prime rate is the rate charged by banks to their most creditworthy customers. It is a widely used benchmark for credit card and mortgage rates. As of August 27, 2008, the prime rate, as published by the Wall Street Journal's bank survey, was 5.00 percent. Under normal circumstances, your card issuer takes the prime rate and adds on a certain amount. This figure then becomes the interest rate on your credit card. Say your credit card company offers a rate of Prime + 8.99 percent. Your rate would be 5.00 + 8.99, or 13.99 percent. Is this good or bad? It depends on a number of factors, but overall, it would probably be considered a good rate. During the last ten years, the prime rate has fluctuated between almost 10.00 percent as a high and all the way down to 4.00 percent as a low. This may not seem drastic, but it can add up quickly if you carry a high balance on your card. When interest rates are dropping, it usually means good news for you as a cardholder. When they rise, it often means you will have to pay more in interest on your card. The prime rate changes periodically, so pay attention to the adjustments on your credit card statement. If you are very concerned about the interest rate on your credit card, you might consider looking into a fixed rate credit card. A card with a fixed rate will not shift as often as one that has a variable rate. Card companies can still adjust fixed rates, but they first need to notify you of the change. Before getting a new credit card, consider the interest rates involved and check what the current prime rate is. Doing so will help you stay on top of your finances, and make wise choices when it comes to interest rates.
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