All you need to know about credit card rates

All you need to know about credit card rates

Take a look at all you need to know about credit card rates. In this article you will find all the important information related to credit card rates. Keep reading to find out all about it!

Take a look at all you need to know about credit card rates. In this article you will find all the important information related to credit card rates. Keep reading to find out all about it!

Credit card accounts may offer a number of different rates, but how each one applies depends on how you use the card. By understanding credit card rates better, you may be able to use them to your advantage and avoid a lot of frustration.

Standard or contract rates are your regular credit card rates. They’re part of the contract you agree to when you accept a credit card, and they’re listed on your monthly statement. It’s important, however, to know that these rates can still change. Issuers typically reserve the right to change rates based on your credit history, market conditions and other reasons.

If your rate changes, your issuer is generally required to notify you first. They explain the reason for the increase or decrease and let you know about your options, including whether you can opt-out of the rate change.

Standard or contract rates are your regular credit card rates.

Variable rates are tied to an index, such as a U.S. Prime Rate, and can go up or down if the index changes, depending on how often your credit card issuer updates the rates. Check your account agreement to see if your rates may update quarterly or monthly.

The penalty rate can be imposed as a result of occurrences such as late payments. Check your account agreement to see whether your issuer may impose a penalty rate—and if so, what you need to do to avoid it. The best defense against a penalty rate is to always pay your bill on time. 

Cash advance rate is applied to transactions considered cash advances—that’s when you use your credit card for a loan against your credit line. This can be when you use your credit card to get cash from the bank or an ATM, or to purchase foreign currency or casino gaming chips.

Cash advance rate is applied to transactions considered cash advances

It also includes when you write checks the credit card company sends you or transfer funds from your credit line into a deposit account. The cash advance rate is usually higher than the rate applied to purchases.

Finally, promotional rates (sometimes called teaser rates) are temporary rates that encourage you to use your card. These rates can be offered as a special deal with an existing card or as an introductory rate when you apply for a new card.

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