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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