How do you determine if
the interest rate associated with the card
you are applying for is right for you?
First be aware that the
interest rate and the way it is figured
are of major importance to you. Because
they determine how much interest you will
pay if you don't or can't pay your bill of
in full each and every month. They
determine whether you will even have any
interest at al to pay.
Federal law requires that
each and every bill you get from the card
issuers have the interest rate clearly
written on the front. Two interest rates,
in fact: the annual percentage rate, which
is the yearly rate, and the periodic rate.
The periodic rate is the monthly rate,
since you usually get billed once a month.
The two rates are exactly the same rate,
but figured over different time periods.
How do you tell if the
interest rate on your card is a good one?
The rates can be any from 2.9% to 25% or
higher. It is not easy to find a card with
2.9% interest rate (this is very low and
is usually linked to a special teaser
introductory rate that goes up after six
months). But by looking around, you should
be able to find a card that does not
demand more than 12 percent or at most 15
percent.
The difference, on an
average balance of $2000 over a year from
an annual interest rate of 10 percent to
25 percent is $280.
