If you carry a credit card, which most people do, you might be interested in knowing how your APR compares to the industry average. Obviously, there are a number of factors that will impact the interest rate you receive on your card. In addition to your credit rating, factors such as which type of card you have and what the card is used for will also play a role in determining your rate. For example, reward credit cards tend to have higher interest rates as do student credit cards.
Student credit cards – 16.83%
Airline credit cards – 15.20%
Bad credit credit cards – 13.64%
Reward credit cards – 13.49%
Instant approval credit cards – 13.45%
Business credit cards – 13.80%
Cash back credit cards – 12.64%
Balance transfer credit cards – 11.68%
Low interest credit cards – 11.63%
Now, keep in mind that these are averages. Therefore, if you have an interest rate that is lower than what is listed, you’re enjoying a below average interest rate. Whether your interest rate is below average or not, however, it never hurts to ask for a lower rate. If you are at the average or above, you should definitely give the credit card company a call – and you might want to keep this information on hand when you do so. If you’ve consistently made your payments on time and your account remains in good standing, there’s absolutely no reason why you should be paying an above average interest rate with your credit card.
The fact that the Federal Reserve recently lowered interest rates by 0.25% should not be enough to put a smile on your face. Although a little over half of credit card issuers do tie their interest rates to the Prime Rate, it can take as long as 90 days before you see that change hit the bottom line – if you see one at all. In addition, this small of a percent change is unlikely to make much of a difference when it comes your credit card debt. In fact, if you have a card with a balance of $5,000 and you’re paying a 17.5% interest rate, this change will only drop it down to 17.25. When all is said and done, you’ll only be saving a little over $1 per month as the result of this change. So don’t get too excited over those quarter point reductions in the Prime Rate.
Get out there and request that your APR be lowered. If the credit card company won’t work with you, start looking for a new card issuer to deal with. There are far too many crd issuers willing to give you their business.
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