Credit card interest rates are affected by four different factors. These are credit rating, debt to income ratio, employment history and repayment history. Interest rates are normally connected with the US Prime Rate, the common national rate standard provided by the Federal Reserve Board or FRB. Your interest is being computed at the end of a billing statement period. This varies from one credit card holder to another. This will then be charged to you at the last day of your statement period. If you are good in managing credit, your credit card interest rates will be definitely lower.

Credit card companies look into your financial background when computing for interest rates. If you are in the habit of paying late, your interest rate might be increased. However, for some, they wonder why their banks increase rates on bills even if they are paying on time always. This may be because their credit scores fell in the past few months because of various reasons.

You are advised to take credit management seminars to know more about how debts and credit card interest rates work. Credit card companies are not very strict in imposing different rates to clients. They will in fact not think twice about lowering interest rates if you show them you are paying on time for the past few months and paying the minimum due every month until the debt is fully written off.

Times are hard and even the business sectors are experiencing the difficulties of an economic downturn. You cannot blame them if they are raising interest rates for many cardholders. In fact, most of them are now also forced to be stricter to new applicants of their credit cards. They are carefully studying the financial capabilities of applicants before granting them a card.

Consumers are generally attracted to credit cards because they can defer payment on their purchases. If you are one of those who have a current balance on your card, you should know that credit card interest rates are the key to manage your debt. Any late or non-payments on your balance will force banks to lower your credit score. If you are having a hard time even paying the minimum required per month, you can always seek the help of a debt settlement company to help you finish paying for your debts. Speak with your banks also and request for lower interests if possible. Some banks are amenable to such requests.

However, if you can, paying for your outstanding balance in full is always the best option. Moreover, cut down on credit spending if the purchase is not really necessary.

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