Credit Card Interest Rates – APR

As you are most likely already aware that credit card interest rates can be very high with rates of 30% annually, depending on your credit history and issuers are getting more and more diligent watching for late payments and over limits and may raise your interest rates and lower your credit limit because of it.

The annual percentage rate (APR) is the interest rate you will pay if you carry over your balance from month to month, take out a cash advance, or transfer balances from another card. If your like most who sometimes may carry over a balance each month, you should be more interested in a card that carries a lower interest rate, but the lower interest rate means you need a good credit score. Companies may charge a yearly fee in addition to the interest rate. Many issuers, including most of the largest credit card issuers, have started lowering interest rates to below the 18 to 19 percent levels that were common through most of the 1980s and early 1990s.

If you have unpaid balances from previous months, there may not be a grace period for your new purchases. The grace period can help you avoid finance charges by paying your balance in-full before the due-date. There is usually one annual percentage rate (APR) for purchases and another for cash advances (usually the highest), and yet another for balance transfers.

The Federal Reserve System surveys credit card companies every six months and has a easy to understand explanation of commonly used terminology, and a survey of major companies which is updated twice a year. The Federal Reserve plans to require companies to give consumers at least a 45 day notice before they can raise interest rates and to provide clearer info on the fees. The Federal Trade Commission also explains terminology but also has information on where and how to file a complaint.

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