how can i know what interest rate i should be paying on a credit card ?

Question

just curious if there is a way to calculate it

Answer 1

APR rates depend on the credit card company, your credit, and how you managed the account (i.e. late payments, charging over the limit, or defaulting). Some companies offer better rates than others do, but once you make a late payment or go over your credit limit they can jack your APR to 30% or higher. I had a Citibank Student card at 17.5% APR. I never made a late payment, but I had gone over my credit limit a few times. Within the year, the APR rate increased to 31.9%.

Do some research and shop around for the best rate. You can shop for credit cards Bankrate.com that offer many different perks at Bankrate.com. In addition, Federal Credit Union’s offer some of the best rates. However, the credit approval criteria may be stricter.

Answer 2

This may not be an answer to your question, but watch out for the details of how interest is calculated. They may say 18% interest by that is supposed to mean 18% per year. In fact, it is compounded (added to the principal) each month and then interest is charge on that. Not sure what that equals but it would not surprise me if it was effectively 19-20%, not 18%.

Also, often, if you pay your entire balance before the due date, you pay no interest. However, if you are even late 1 day, or do not pay the full amount, you pay interest on the full amount 'back' to the day it was purchased. Also, if you pay half, the payment often applies 'first' to the most recently purchased items or the items that accrue interest last (purchases, cash advances, balance transfers), meaning the other items purchased earlier get charged interest.

Bottom line, the banks are in business to make money. They make most of their profits in a few select areas including banking fees, interest on credit cards, % from visa/MC charges, etc. This is why they try to reel you in with great offers and points, because they make enough money off us to give us the freebees. Also, this is why every major store offers financing and often a credit card of their own.

If i could give some advice, minimize the use of credit cards. Its bad enough paying a mortgage for 10-50 years and having 50% of the amount paid go to the bank. Don't pad their profits even more by letting them get you with fancy credit cards and offers. If it even gets out of control a bit, you end up playing catchup with your budget. Almost all people with money issues or bankruptcy also owe lots to the credit card companies, which ends up putting them further and further in debt, to the point where there is no way they can get out. This is why the average North American owes some ridiculous amount to credit card and major purchase financing (i.e. electronics and furniture). They make it easy for us to get credit so they can basically loan shark our money away from us.

Answer 3

Call the credit card company and ask what you are paying. With good credit and a good payment history, you may be in the 14-18% range. You may be able to get it lowered simply by asking. And we all know that it never hurts to ask.

It is also on your statement. It will show under the finance charges section.

Answer 4

Most credit cards have a going rate of 18% interest. This varies with every card.

Answer 5

I think the present methodology is that if you make no further transactions on the card and pay the minimum payment, the card would be paid off in three years.

So you could mathematically figure it out.

Answer 6

The rate should be on your card agreement.

Answer 7

Read the pamphlet which came with it.