Credit Card Rates
All of your credit card purchases are subject to interest, which is calculated as the Annual Percentage Rate, or APR. APR basically measures how much interest you will pay over a year, and that number will vary dramatically among cardholders — and is based primarily on your credit score. Because interest charges can rack up fast on unpaid credit card balances, it is always a good idea to make every effort to pay off your balance each month. For more information on Credit Cards, click here.
It’s also important to keep in mind that often, credit card companies charge different, higher rates for certain transactions, like balance transfers and cash advances. Should you fail to pay your bill, a company can even charge a penalty rate. And if you have a variable credit card rate it can change with the prime rate, so it’s a good idea to keep your eye on that.
So many different kinds of credit cards are on the market today it can be difficult to choose one. Make sure when you apply for a credit card that it has some added value for your personal situation. For example, if you love to travel, consider a card that provides you with the most travel rewards. Or, if you prefer cash back, opt for that type of card.
If your credit is less than stellar, maybe you should choose a secured credit card, which requires you to make a deposit of the limit amount. The credit card issues hold onto your deposit as security in case you can’t pay back the amount you charge. A secured credit card can be an excellent way to build credit, provided you make your payments on time, every time.
Rates on credit cards vary a lot. Here are average rate ranges for a few different types of cards, according to ValuePenguin:
- Travel rewards cards: 15.99 percent
- Cash-back cards: 22.99 percent
- Student cards: 22.62 percent
- Business cards: 15. 37 percent