Credit Card Rates Fluctuate With Market And Personal Responsibility
When people apply for a credit card, in addition to any potential rewards for signing up with a particular company, the credit card rates are one of the most important pieces of their decision. The interest rates charged by a credit card company are also some of the most confusing aspects of using a credit card and the rates can often change for some of the most mundane reasons.. Even if a person pays their card bills on time every month, there could be other aspects of their financial life that causes a change in the credit card rates they are being charged.
In most cases, a person can find a card with low, introductory credit card rates that may remain low if they meet all of the requirements of the company. Many times, to attract new consumers, a credit card company will offer a low introductory rate for the first six months or so, and then increase the rate depending on the consumers payment habits. Many times transferring balances from one card to another comes with low credit card rates for the first year and then the entire card balance is subject to a higher rate.
Additionally, any negative report made to the credit reporting agencies may be cause for a credit card company to adjust the credit card rates upwards, as they believe the cardholder is becoming less of a good risk to repay the credit card debt.
On-Time Payments Help Secure Future Rates
With nearly all credit cards there is a grace period in which the cardholder can pay the entire balance and not incur any interest charges. With some of these cards, there may be a monthly service charge added to the balance, the credit card rates are essentially zero for that month's purchases.
However, the entire balance has to be paid in full not to incur any charges at the current credit card rates. If the cardholder inadvertently pays even a dollar less than the total amount due, the credit card rates can be applied to entire balance and not only the amount that was not paid by the due date.
Whenever a person applies for and receives a credit card, they should thoroughly read and understand the fine print in the cardholder agreement. This insures they full understand all of the different circumstances that can cause the credit card rates to change and how much notice they will receive of a change going into effect.
