Credit Card Interest Rates

Posted on December 21 2009

There are many changes taking place in the credit card industry these days, and different legislation coming into place to try to regulate the industry. As always, there are loopholes and new things to be aware of any time there is change. Part of the legislation is around regulating fees that creditors can or cannot charge. There are companies out there that are combating these changes by raising interest rates. One offer out there is for a no-fee account for consumers with sub-prime credit who are not able to qualify for most credit cards. Most people can get approved for these types of accounts regardless of their credit situation, however the interest rate starts out at 79.9%! The average interest rate as of December 8, 2009 was 16.36%. Just to compare, if you had $500 on a credit card with a 79.9% rate, you would pay roughly $33/month in interest, and $400/year. Now, if your rate was 16.36%, you would only pay less than $7/month in interest, and $82/year. Make sure you take the time to do some research, even in an emergency, to find the best fit for your situation. Don’t just take the first offer on the table. More than likely if one creditor will extend credit to you, there are other creditors out there that will do the same.

If you are trying to rebuild your credit but have found it difficult to find any reasonable credit cards consider talking to your bank about applying for a secured credit card. You may find this to be the best option with the least amount of fees.