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Change is a fact of life. You must understand how, why, and when the rates change on credit cards because it can save money.
Promotional rates are temporary rates because the credit card company is wanting to get you to use their card. They are usually special deals with a card you already have or promotion to get a new card. Make sure to find out:
Exactly when the low rate will expire. Especially if you are using it to pay off debt with the low rate.
What the standard rate will be after the promotional rate ends.
Check the account agreement and learn how the credit card company treats minimum payments.
Bottom Line Rates
They’re the rate that you accept in the agreement when you got the credit card, your monthly statement should have it listed. Most credit card agreements say that they can change these rates:
Variable rates go up and down because they are tied to an index like U.S. Prime Rate and they change along with the index. Your account agreement should tell you if this change is updated quarterly or monthly.
Credit cards reserve the right to change rates based on your credit history, market conditions, or any other reason they decide. Even though, you have a non-variable rate it may still change, but if the rate changes, your issuer will notify you.
Take advantage by paying your balance in full every month. If you have a grace period, you can avoid paying interest on purchases.
Paying on time is the best way to defend against a penalty rate. Not all penalty rates last forever. Check your account agreement to see if they impose a penalty rate and if so for how long. Issuers are required to review your account to see if the penalty rate can be reduced. Find out when that is and follow up with your credit card company.
Understanding and keeping track of your credit card rates will help keep you in control of your finances. The more you know and understand the better you can plan.
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Originally posted 2013-04-05 01:05:49. Republished by Blog Post Promoter