Credit Card Expert Blog

How Interest On Credit Cards Work

Interest rates on credit cards are the most arbitrary part of the credit card agreement.  I have called credit card companies in the past and told them that I felt that the interest rate I was paying was too high and they need to lower it or I was taking my business elsewhere.  The result?  Every single time they would lower my rate and most times they would cut the rate in half.  So you need to keep an eye on your credit card interest rates because the credit card companies love to get you signed up on a great introductory rate and then raise that rate over time.  It is not an uncommon practice and there really is nothing shady about it, you just need to keep an eye on your credit card statements.

Almost all of the credit card companies that advertise great introductory rates inevitably raise that rate after a set period of time.  By law the credit card companies have to disclose when they will be raising your rates and how much they will be raising them to.  A great introductory rate of 8% can legally become 24% after the introductory period so be careful when you sign up and read the entire agreement.  The best way to avoid all of that is to ask your regular bank about their credit card deals.  It is usually the deals that go unadvertised that are the best deals to get.  Many banks will start you at a 10% or 12% interest rate which is reasonable.  If you have good credit then there is no reason you should pay an interest rate any more than 10% or 12%.  Also keep an eye on your statement every month as some credit card companies love to raise rates and they can do so without any advance warning. credit card web icons

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