While many people have probably come to expect an increase in credit card interest rates with a change in the prime rate, many are finding that these rates have slowly been increasing without it. While it has not been very noticeable to many, experts and researchers believe this will change as the “time of historically low interest rates” are now at an end.
According to an article entitled “Credit Card Interest Rates to Trend Higher”, interest rates of credit cards have been slowly increasing and are expected to continue. In fact, it is stated that the average credit card interest rate reached just above 14% in February, up from 12% of two years ago. In addition to that many experts believe that it will drastically rise by the end of this year, possibly pushing the average to above 16%.
Read more…
Credit card interest rates are affected by four different factors. These are credit rating, debt to income ratio, employment history and repayment history. Interest rates are normally connected with the US Prime Rate, the common national rate standard provided by the Federal Reserve Board or FRB. Your interest is being computed at the end of a billing statement period. This varies from one credit card holder to another. This will then be charged to you at the last day of your statement period. If you are good in managing credit, your credit card interest rates will be definitely lower.
Credit card companies look into your financial background when computing for interest rates. If you are in the habit of paying late, your interest rate might be increased. However, for some, they wonder why their banks increase rates on bills even if they are paying on time always. This may be because their credit scores fell in the past few months because of various reasons.
You are advised to take credit management seminars to know more about how debts and credit card interest rates work.
Read more…
