How to Determine What the Interest Rate Is on a Credit Card

Knowing--and monitoring--your credit card interest rate is critical, as rates fluctuate according to market conditions, shifts in your credit score changes in your payment patterns, and more. Credit card companies may entice you to open an account with low or no interest rates. But rates can skyrocket with a single missed payment--and for other reasons unclear to the consumer. Interest rates may vary according to transaction type. To safeguard your money, you may wish to keep an eagle eye on the rate of your existing accounts--and those at competing credit card companies.

Things You'll Need

• Credit card agreement
• Credit card statement
• Credit card company mailings
• Credit card company contact information

Instructions

1. Read the cardholder agreeement that is typically enclosed with your new credit card. It will include information on the APR, or annual percentage rate, which is the interest rate.

2. Examine thoroughly any addenda or modifications to the agreemente that may be included with your monthly statement. Credit card issuers have the right to change your interest rate at any time, even if they claim your interest rate is fixed for life. Card companies must notify you of a planned or sudden interest rate change in documents enclosed with your statement.

3. Open all mail from your credit card company. Interest rate change notifications may be delivered by mail separately from your statement.

4. Pore over the monthly statement carefully. The statement usually details the interest rates relative to purchases, cash advances, or transferred balances. Each of these types of transactions may have its own interest rate. If the rates differ, take note to avoid surprises.

5. Contact your credit card company by phone or online if you cannot determine the interest rate from the agreement or statement, or if you notice an unexpected change in the rate. If the company has made the rate change in error, you will save money by catching the error right away. If an increased rate seems otherwise unjustified, you may be able to negotiate it downward by phone or by mail.

Tips & Warnings

• You may be able to renegotiate an existing interest rate if you pay timely every month. Contact your credit card company to speak with a representative.

• Your credit card interest rate may increase suddenly and without warning.

References

• Fool.com: Credit and Debt, Interest Rates 101

Resources

• CreditCards.com: Low Interest Credit Cards