Do All Credit Cards Have a Variable APR Rate?

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Many credit cards state that they do not have a variable APR, or annual percentage rate, but stipulations in the contract may allow the credit card company to change the interest rate to a variable APR. Read the fine print in a credit card contract with advice from a financial adviser in this free video on credit cards.

Part of the Video Series: Credit Cards & Personal Loans
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Video Transcript

Hi, my name is Matt McKillen. I'm with Innovative Financial Group. I was posed a question from a client today; do all credit cards have a variable interest rate or APR rate, annual percentage rate? It just depends on the agreement that you sign with the banking institution where you get your card. Most of the cards that I see actually do state that the interest is fixed, but if you look into the fine print of your agreement, your service agreement, there are stipulations that you must meet certain requirements on the account for the rate to stay the same. One of them is that you cannot go late on the payment. Another item is that you cannot go over the high credit limit. So, let's say you are charging some items, and your credit limit is five hundred dollars and you actually run up five hundred and seventy five dollars. There's usually stipulations that the bank can take that fixed rate of interest you have on your card and bring it up to a much higher market rate. I've seen rates go from as high as nine, ten, eleven percent up to twenty four percent just because a payment was a couple days late, or someone went fifty dollars over their high credit limit. So, you really need to look at the statement, and the contract and agreement you sign when you accept a credit card to determine whether or not it's actually fixed, or if there's a variable option on it. Again, my name is Matt McKillen. I am with Innovative Financial Group.


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