Understanding Credit Card Interest Rates
The only thing more challenging than managing credit card debt is getting out of it. To accomplish this important goal, you need a sound budget, plenty of discipline, and a credit card with the lowest possible interest rate. Every bank is legally required to clearly disclose each card’s Annual Percentage Rate, or APR. However, most banks will disclose a range of possible rates, with each applicant being offered a particular APR according to their credit rating. The lowest rates available will often be granted only to those applicants with the highest credit scores.
Variable Interest Rates and the CARD Act of 2009
Nearly all credit cards have a variable interest rate. The good news is that the CARD Act of 2009 prevents banks from arbitrarily raising their rates on cardholders in good standing. Nearly every card on the market will offer a variable APR that is based on the Prime Rate, which is determined in part by the Federal Government. The variable interest rates quoted by the credit card issuers will rise when the Prime Rate does.
Lowest Interest Rate Credit Cards
One example of a low-interest credit card is the BankAmericard® credit card, which offers 0% Introductory APR for 21 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the intro APR offer ends, a 15.99% – 25.99% variable APR will apply. A 3% fee applies to all balance transfers. This card is great for people who want a low-interest card to help carry a balance from time to time. There is no annual fee.