The interest rate on your credit card is determined after the approval of the credit card. The convenience of making a credit card balance is associated with interest on the balance obtained during the grace period. There are two types of interest rates associated with your cards: fixed or variable. The difference between them will affect the change in the interest rate and should be notified before the card issuer changes course.
Fixed Interest Rate
Fixed interest rates usually remain the same throughout the time of use of your credit card. There are certain circumstances in which a fixed interest rate may change:
If Payment with a credit card took over 60 days
When You have had a promotional rate that ended
You just finished a debt management program
If your card has a fixed interest rate, your rate may not increase in the first year of account opening, unless for one of the reasons listed above.
Before the issuer of your card may increase the interest rate, you must give him a 45-day notice period before the increase takes effect. After receiving the interest rate notice, you may withdraw from the interest rate increase. Canceling gives you the option of paying off your previous interest balance.
What is different about the variable interest rate | Credit Card Interest Rate
You don’t necessarily need to be informed abt the variable interest rates which change. The variable rate is linked to a different interest rate, known as an index rate. A variable interest rate is a certain number of percentage points above the index rate. For instance, a variable interest rate on the card may be + 13.79% of the capital. In this case, a margin of 13.79% is added to each base rate in a timely manner to obtain the interest rate. The preferential interest rate is currently 5.50%, with an interest rate of 19.29%.
The variable interest rate will increase and decrease as the base rate decreases up and down. You will not know if the interest rate has changed unless you pay attention to the credit card invoice. If the credit card company increases part of the variable interest rate margin, the principle of increasing the fixed interest rate is applied.
Credit Card Interest Rate | fixed rate and the variable rate which is better?
The requirement to increase the advance and the possibility of lifting the interest rate increase is one of the main advantages the fixed interest rate has. With variable interest rates, you can find out when the interest rate will increase if you pay attention to when the Federation raises interest rates. You can avoid paying the full interest rate by paying the full balance at the end of each month. In this way, it does not matter if the interest rate is fixed or variable.
Credit Card Interest Rate | fixed rate and variable rate