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Understanding the Impact of Credit Card Interest

by on December 20, 2011

The one thing that credit card consumers usually zero in on is the interest rate. However, there is much more to understand than that one number.

Did you know that your interest rate can be increased if you are late on a payment? If you are more than 60 days late on a payment, credit card companies can charge you a higher interest rate, a fee for a late payment, and the added interest you may accrue. Be sure to pay on time to avoid this penalty.

Another thing to pay attention to is the interest rate for cash advances and balance transfers. You may know your interest rate on new purchases, but did you know that number does not always apply to balance transfers or cash advances?

Lastly, be sure to know your credit score. A good credit score will get you better interest rates. If you recently applied for a new card, and you do not have good credit, you may still qualify for it, but you may not have gotten the best interest rate.

Source: http://www.forbes.com/sites/moneybuilder/2011/12/09/credit-card-rates-six-things-to-know-about-interest/
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