Why the Interest Rate on Credit Cards is Important
When you get offers for credit cards in the mail do you stop and look at the interest rate? Do you even know what the rates are on your current credit cards and do you even care?
Many people simply glance over these numbers and it's silly for them to do this because when they don't stop to consider the interest rates they could literally be throwing money away each month. Interest rates affect the affordability of everything in our lives and they are important whether you have just one debt card or many of them.
Debt Cards, Interest Rates, and You
Are you wondering why interest rates should be important to you? It's simple really, they are important because they determine how much you are paying in addition to the charges that you make each month.
For instance, if you have a credit card with an 18% interest rate and your balance was $3,000 you would be paying roughly $540 in interest but if you had a credit card with an eight percent interest rate you would be paying just $240 in interest! This is a big difference because who couldn't use an extra $300 in the bank?
When you have debt, it is important that you know what you are paying the credit card company for the convenience of using their money. Even if you did not pay attention to this in the past, it is not too late to look into it now.
If you find that you are paying a lot in finance charges you can always transfer your balance to a card with a lower finance rate. When you do this, you could be saving yourself hundreds or even thousands of dollars per year.
If you have more than one store or debit card you may find that you are able to save even more. If you have several cards with several thousand dollars on each and you are paying large financing charges you are literally throwing your money away.
You need to seek out options that are going to give you lower interest rates because it will allow you to pay off your debts quicker, stop accumulating so much in the way of late and finance charges. Who doesn't want to find a way to decrease the debt that they have? This is a straightforward way to do just that.
As you can see, the finance or interest rates on any given credit card are important to you. You might have not even known what these numbers mean before, but now that you do, you need to be more selective. You will find that the rates vary wildly from card to card and that some are many points lower than the other.
The lower the rates the more affordable the credit cards will be for you. If you have a credit card already that has a very high rate when you start shopping around, you should definitely look into paying off the balance with a loan or transferring the balance to another credit card with a better financing rate.