There is no doubt that low interest rate credit cards benefits cardholders in a variety of ways.
The interest rates we refer to are known as the annual percentage rate (APR).
This is basically the cost of the credit that is extended to the account holder.
Now understand that if you do in fact pay your bills in full each and every month and do not carry over a balance from one billing cycle to the next then the interest rate has actually no effect on you.
It only affects those of us that carry balances.
When we speak of interest rates in the context of credit cards they come in two forms, variable and fixed.
Variable simply means that the interest rate, or APR, can be adjusted up or down (guess which way it usually goes) by the credit card company at their discretion.
Fixed rates, or a fixed APR if you prefer, do not change.
Typically if the cardholder follows the terms of service then they will not have their interest rates raised.
That means making all payments on time and paying the minimum payment threshold or more.
Some issuers however, have recently taken heat for raising fixed rates and that predictably angered account holders and drew the ire of Congress.
That is one the reasons for the credit card reform legislation that was recently enacted by Congress as a means of protection for consumers.
That legislation states that card issuers will no longer be able to raise the APR on a fixed account.
They can however raise rates on the variable APR accounts.
Because of this new law many of the banks and credit card issuers are moving away from fixed-rate cards altogether.
They want to retain their right to raise rates.
In many cases the fixed low interest credit cards will be accompanied by an annual fee.
The consumer must take into account how much the fee is and decide for themselves if paying it is worth the savings that the low interest rates will bring.
Like so many other things in life it's a balancing act of sorts.
Prevailing rates are typically tied to the Fed funds rates and to treasury securities.
They can and do fluctuate as market conditions warrant.
The prospective cardholder must decide for themselves which type of card better suits their financial means.
A credible website will allow you to compare offers.
It should clearly list all of the pertinent information making it easy to conduct side-by-side comparisons.
Pertinent information includes the APR and annual fees.
Other important information such as grace periods, penalties and lines of credit can be found in the disclosure statement and should be carefully read.
The interest rates we refer to are known as the annual percentage rate (APR).
This is basically the cost of the credit that is extended to the account holder.
Now understand that if you do in fact pay your bills in full each and every month and do not carry over a balance from one billing cycle to the next then the interest rate has actually no effect on you.
It only affects those of us that carry balances.
When we speak of interest rates in the context of credit cards they come in two forms, variable and fixed.
Variable simply means that the interest rate, or APR, can be adjusted up or down (guess which way it usually goes) by the credit card company at their discretion.
Fixed rates, or a fixed APR if you prefer, do not change.
Typically if the cardholder follows the terms of service then they will not have their interest rates raised.
That means making all payments on time and paying the minimum payment threshold or more.
Some issuers however, have recently taken heat for raising fixed rates and that predictably angered account holders and drew the ire of Congress.
That is one the reasons for the credit card reform legislation that was recently enacted by Congress as a means of protection for consumers.
That legislation states that card issuers will no longer be able to raise the APR on a fixed account.
They can however raise rates on the variable APR accounts.
Because of this new law many of the banks and credit card issuers are moving away from fixed-rate cards altogether.
They want to retain their right to raise rates.
In many cases the fixed low interest credit cards will be accompanied by an annual fee.
The consumer must take into account how much the fee is and decide for themselves if paying it is worth the savings that the low interest rates will bring.
Like so many other things in life it's a balancing act of sorts.
Prevailing rates are typically tied to the Fed funds rates and to treasury securities.
They can and do fluctuate as market conditions warrant.
The prospective cardholder must decide for themselves which type of card better suits their financial means.
A credible website will allow you to compare offers.
It should clearly list all of the pertinent information making it easy to conduct side-by-side comparisons.
Pertinent information includes the APR and annual fees.
Other important information such as grace periods, penalties and lines of credit can be found in the disclosure statement and should be carefully read.
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