Not all credit cards are created equal. You will always find the good, the bad, and the ugly credit cards in the world of plastic credit. But there are some credit cards that are the worst of the worst.
If you are paying too much in interest rates, put the FREE credit card finder to work to find reasonable credit card rates now!
The average consumer usually has at least two credit cards. If you think your interest rate is too high, then read on. You will be surprised at how high interest rates can really be.
Unimaginable Credit Card Rates Hit the Market
One of the worst credit card rates to be found is offered by First Premier Bank. They offer a MasterCard credit card that requires an annual percentage rate (APR) of 79.9%. That is after the annual fee and processing fee just to obtain the card. Once you agree to the outrageous APR, you will receive your credit card that has a $300 credit limit.
You might think this is an abomination to credit card rates, but the justification is that someone with bad credit who is desperate enough for a credit card will agree to this rate. If a consumer has no other recourse to establishing credit, this may be their only alternative.
First Premier Bank also offers another credit card with a slightly lower APR of 59.9% to those consumers who are not such a risk. Anyone with a credit score of less than 640 is considered high risk.
Credit One offers a Platinum Visa that offers a 23.9% APR that also has a wide range of other fees associated with the card. All of these fees are used by the issuing company to help offset the costs of extending credit to consumers who may not pay off their debt once they get the card.
Issuers justify chaining these extremely high rates to their credit cards because the rates have to offset the amount of risk the issuer is taking by extending credit to someone who has such a poor credit score or bad credit history.
These Interest Rates are Completely Legal
These rates are perfectly legal as long as the issuing organization provides a full disclosure of its terms to the consumer, which is required by the Truth and Lending Act of 1968.
This means that any and all credit card issuer can decide to raise your interest rate for any reason that they deem fit. As long as they inform you of it at least 45 days ahead of time, they are within the legal confines of the law.
As a consumer, you have the right to question their reasoning. You can also request that they negotiate the interest rates with you. At any time, you may call your issuer and request a decrease in your interest rate as well.
The Federal Trade Commission (FTC) has some extensive information that delves into the nitty gritty of credit card do’s and don’ts. By being aware of your rights and responsibilities as a consumer, you can save yourself a lot of headaches and hassle. For further reading about credit cards, go to the Federal Trade Commission website.
Sometimes High is Not so High
The average interest rate today is around 14%. But that is only if you have a credit score that is comparable to walking on water. Most consumers average their interest rates anywhere between 14 to 29%.
Therefore, if you have a credit score of 650 and an interest rate of 22%, that may be a good thing compared to a rate of 79%.
Ways to Avoid Paying those High Credit Card Interest Rates
If you are one of the unlucky few who actually feel that you need to apply for one of these exorbitantly high rate credit cards, you could circumvent paying any of the interest if you use your card wisely. Do not over extend yourself. Keep your purchase amounts to an affordable limit and pay off the entire balance each month.
Avoid late fees by making your payments on time.
Making the minimum payment per month is not wise because the interest rate alone will cost more than what the minimum payment is. Always try to pay more than the minimum payment so you can pay off the balance as quickly as possible.
No Factor is More Important than Your Credit Score
Your credit score can sometimes make or break you. Make sure that you know what is being reflected on your credit report is completely true and accurate. Go to AnnualCredit Report.com and get a free copy of your credit report.
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