CREDIT CARDS » Credit Card Rates

Now, more than ever, it is important that you read every piece of collateral mail sent to you by your credit card company. Each time you feel you are getting stumped on a term, review this quick list for a full understanding of the terms that you have agreed to for the luxury of using your credit card. Some basic tips to assist you are:

• Average Daily Balance - Used for interest calculation, the average daily balance is the total balance being carried on a credit card divided by the number of days in that billing month
• Annual Percentage Rate - Aside from the cost of the purchases the APY is the interest rate you must pay
• Balance Transfer - The act of moving the balance from one credit to another that consumers may do to consolidate their debts or lower their interest payments
• Cash-Advance Fee - The rate you are charged for using your credit card to obtain cash
• Card Holder Agreement - The terms of agreement including interest rates, annual fees, and other details that you agree to abide by for the luxury of securing a credit car
• Finance Charge - The amount that you must pay in addition to the original cost of the purchases, the finance charge is computed from the purchase balance on the card and the interest rate
• Grace Period - The amount of time you have to make a credit card payment before you are considered "late"
• Minimum Payment - The smallest amount you need to pay off your balances monthly to keep your credit card in good standing
• Pre-Approval - Is a promotional offer used to entice new customers to apply for a new credit card, although the changes of getting a card that has been "pre-approved" is good, it is not guaranteed
• Principal Amount - The actual amount of debt you incurred for purchases on your credit card
• Secured Card - Credit cards generally used by those who have bad credit histories as the credit card company establishes a link directly to the card holder's savings account and withdrawals the monthly payments automatically
• Variable Interest Rate - A fluctuating percentage expressed in yearly terms that the credit card holder must pay regularly to stay active

The world of finances, including credit cards, tend to have their own glossary of terms to describe certain nuances and behaviors of the industry. If you are trying to get a hold of your credit, it isclimacteric that you gain a full knowledge of the language used by the credit card industry. Once you understand the credit card terms, your monthly statement will not seem as mysterious and confusing, thus allowing you to "tame the beast."

Since Congress overwhelmingly voted to pass a credit card legislation bill protecting consumers from unfair interest rate hikes and fees, credit card companies have been working to get their rates increases in before the legislation becomes official. In other words, your credit card interest rates were likely to have gone up yesterday as credit card companies raced to raise rates before the closing bell.

For instance, one of our readers notified us this morning that she received a letter yesterday that Chase was increasing her credit card interest rate from 9% to over 13%. The verbiage in the letter explained the reason for the rate increase was in order to "maintain the profitability" of the account. The notice gave a couple of weeks time to either a) close the account or b) do nothing and accept the rate increase.

Why did credit card companies rush to increase rates?

Under the new legislation:

1. No more retroactive rate hikes - Credit card companies cannot increase rates on existing balances, but only on new balances.
2. Longer notification periods - Credit card companies must give 45 days notice, rather than just 15

What should you do if your credit card rates have been raised?

1. If you've had the card a while and have a history of good payments - You may want to keep it in order to keep the age of your good credit accounts as old as possible. Learn more about maintaining old lines of credit
2. If you keep low balances - Consider keeping the card. The amount you're paying in interest is pretty low.
3. If you keep high balances but good payment record - You may want to consider finding a lower credit card rate and transferring your balance.
4. If you keep high balances but have bad credit or payment history - Focus on paying down your account, improving your credit, and then try to get a new card with a balance transfer. Also, it doesn't help you if they hiked your rate yesterday, but under the new legislation, if your rate is increased and you pay your account on time for 6 months, they have to reduce your rate again to the introductory rate offer.

Have you recently received such a letter or experienced a credit card rate hike? Tell us about it and what you plan to do.

If you've got a less-than-perfect credit score and are stressed out about it, relax.

First of all, you're in good company. Millions of Americans have lowered credit scores due to instances that just about everyone is guilty of: forgotten payments, late payments, accidental balance overages, and...

Although the credit card legislation that was just approved in Congress outlines rules for more accountability on the part of credit card companies and their ability to charge sometimes shocking rates or late fees, it could actually end up hurting consumers during this recession . Increased...

Credit cards are one of the easiest methods of payment today. Most stores accept them and they are quick and convenient. If you have ever applied for a credit card, then you know that certain information is required. Knowing all of the facts before applying for any credit card will help you...

More than 51% of all Americans have more than two credit cards in their name. The reasons for having a variety of different credit cards vary from person to person, but may include reward programs, safety measures and a strategy to improve your credit score . Owning and using multiple credit...

For nearly 20 years, Financial institutions have been offering affinity credit cards, or charity credit cards, which benefit nonprofit groups. Charity credit cards are linked to a charity (featured on the card) that is supported by the credit card issue, but are not the same as cobranded credit...

Choosing between a credit card can be a difficult process. The process must be researched, you need to choose the best card that will meet your needs and complete an application process. It seems that you can secure a credit card from almost anywhere, because both national companies and local...

In the old days, if you were hit with a credit card rate increase you could call and threaten to take your business elsewhere; that was then, this is now . Today, consumers calling in to negotiate a lower credit card rate could be putting themselves at financial risk. That's because credit card...

Nowadays, more Americans are living from paycheck to paycheck and struggling to make ends meet. Even with the best of intentions and balancing checkbooks, an occasional overdraft is a common occurrence. One way to help ensure that you will not suffer the embarrassment or the stiff financial...