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Credit card interest rate

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Credit Card Interest Rate is the crux of transacting, Interest is the most uninteresting term-unfortunately! Credit card interest rate forms the crux of the matter when it comes to deciding up on a credit card. The difference in the rate of interest can make you a little richer or poorer.

Credit card users fail to see the shadow that follows every transaction, yes interest needs to be paid. Some agree upon certain conditions -a small insignificant interest of 8% could swell up to 26% three to four times its original rate. It is directly related to your credit score, lower the credit score higher the rate of interest it affects the balance not to spare the purchase.APR (Annual percentage rate) and the credit card interest rate is one and the same.Compounded daily or monthly and not a fixed interest of rate paid on a stable balance over the year.

The annual in the APR is a misnomer. Where rate of interest means differently and APR means differently, the deal is of a different type. Say, when you make a purchase and pay it off before the billing period (the rate of interest Type) you need not pay interest on the amount, of course only if you make a late payment. On the other hand when you make a purchase and pay it off before billing period (APR Type) you still need to pay interest.The APR interest rates appear to be low; eventually you land up paying higher rates of 29.99 % for daily compounding and 34.48% for monthly compounding spanned over 12 billings and 365 days.
Balance – 1000 X Interest @17% = Total Interest Charge for a year 170.

Why would someone not pay for a convenience (like instant cash or instant purchase) No credit card wouldn’t function if they don’t charge any interest. They need to make some business too. It poses a problem only if you fail to keep commitments, so make friends with interest and feel protected when using the credit card purchases. Credit card interest rate is subject to changes as a mutual agreement is absent here, unlike a mortgage. The mortgage contract lays the terms and conditions clearly agreed upon by both parties. There is transparency in the dealing and no hidden agenda.

Consider this:
• Pay in time– on precise due dates monthly. Unable to do so inform the card company in advance ask for an extension. Stay within limits or else pay penalty.
• Watch out for phrases- such as “no lower than” about APR means the credit card rates will rise and not fall below a certain state. Read terms and conditions
• Negotiate credit card interest rates- The Company can waive off if you have a great record. Unjustifiable excess credit interest rate charges billed to you bring it to the notice of the card company. Reasons could be penalties for late payments.

Credit Card conjures up dreams of convenience, and its after-effect (interest rate) creates nightmares.

 
 
 
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