Major credit card interest rates are generally high percentages because the issuing bank or company wants to make money. Many people default on their monthly payments, which means that they have to charge existing clients even more. However, if you do not carry a monthly balance you don’t need to worry about the interest rate at all.
Here are things to know and tips regarding major credit card interest rate issues. Just remember to be careful, they should be an asset not a burden in your life.
If you can’t pay your bill each month, then the full interest on the entire balance will be charged to you. So, make sure that you can pay your bills in full each month.
Before you get a credit card you should do some research and data gathering first. See how much interest the company or the banks will be charging you. That way you’ll know if you can handle it, in case you can’t pay the full amount.
Here is the calculation formula for interest rate most financial institutions use to get the amount of interest that will be charged to a card holder. Annual percent rate or APR divided by 100 then multiply to the amount of ADB or average daily balance divided by 365 and then you have to multiply it to the total number of days revolved before a payment was made on the account.
People who have credit cards must know or learn how to control and learn the proper way of using it so that won’t end up being buried in debt. You should know how to manage your finances so that you can pay your monthly bills in full. It is OK if you use you using your credit card regularly as long as you are sure that you can pay the bills when it comes.
If you don’t know how to control your spending or your budget then getting a card will be bad for you for you’ll just end up in debt and more debt. Cards are useful and very convenience but if you don’t know how to use it properly then it would be bad for your credit history.
Interest rates are very common not only in credit cards but also in loans. So, it is important to know how much interest banks or issuing companies charge you. You want to know how much interest you are going to pay and if your budget can take the burden or not.
