There are a number of factors that will effect the credit card rates you will be offered by credit card providers. Credit card providers never offer the same credit card interest rate to all of their customers, but using complex calculations of risk assessment and credit worthiness, they set a number of different rate bands, and then place each applicant for credit in the appropriate rate band depending on the factors they used. The main method they use to assess the rate they wish to place you at is your credit score. This is a rating calculated by credit reference companies and is based on factors such as:
-Your Income -The length of time you've held your job -The length of time you've lived at your present address -The value of your home -Whether you own or rent your home -The amount you currently owe -Whether or not you pay your bills on time and in full.
There are other factors too that will be taken into account. These will all be added up to paint an overall picture of you and your financial habits and health. If this score is then deemed to be good, you will fall into one of the lender's low risk bands and will be offered credit on favourable terms and with lower rates of interest. If your score is low you will be offered a less favourable credit card rate or may be denied credit completely. Therefore it is important that you try to maintain a healthy credit rating if you wish to be offered the best credit card rates possible.
Every time you apply for credit your credit score will be used in this way, so it is a good idea to check your report and make sure it is accurate and that there are no mistakes on it that could make it more difficult for you to receive credit on favourable terms and at good rates. If you wish to view your report, you can contact the reporting company and they will send you a free copy of the report. You can receive one free copy of your report from each reporting company per year. This should be enough as it is unwise to request your credit report too often. This is because every time someone views your report, this is recorded and too many views may indicate to lenders that you are desperately seeking credit from a variety of sources.
For you to own a credit card, you should first know what are credit card rates? What is an APR? What are the different kinds of rates?
Credit card rates are used to measure the interest of your credit card. It is used to know how much you would pay if you hold a balance on your account, if you have a cash advance or loan, and if you transferred a balance from other credit cards. The credit card rates are usually computed annually.
1) APR. The APR signifies the annual percentage rate of the interest. The APR is used by the bank to know how much would be charged on your bill for a yearly basis. There are two kinds of APRs:
* Fixed. This kind of APR is an interest rate which has been arranged by the bank. The fixed APR would not be changed unless the bank or the credit card owner would amend the contract of agreement. Majority of credit card accounts that has fixed rates does not change often.
* On-going. This kind of APR is a kind of interest rate that could change even after the signing of contracts and the grace period.
Note: Both the fixed and APR rates would depend on consistency of the bill payments, if you would request your APR to be changed either lower or higher and if certain government provisions was made regarding the annual rates of your credit card.
* Special APRs. These kinds of annual rates would depend on the contract you have signed. If your terms specify a penalty APR when you would not be able to pay for your bills, this kind of rates would apply.
2) Interest rate.
* Fixed. A fixed interest basically means that your rate cannot be changed unless the bank informs you that there have been some changes in the policies.
* Variable. A variable interest rate changes automatically whenever the basic rate of the bank increases or decreases.
Note: Both the fixed and the variable rates could be changed by the bank anytime. This means that any bank could alter the terms and conditions of your credit account for a fifteen-day notice.
Both Peter Kenny & Nicky Pilkington are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Peter Kenny has sinced written about articles on various topics from Credit Cards, Finances and Best Money Market. Peter Kenny is a writer for creditcards-gb For additional articles and an extensive resource for everything about credit cards, please visit us at http://www.creditcards-gb.co.uk and http://www.creditcards2go4.com. Peter Kenny's top article generates over 368000 views. to your Favourites.
Nicky Pilkington has sinced written about articles on various topics from Credit Cards, Mastercard Credit Card and How to Sell on Ebay. More information about credit and credit cards is available at . Nicky Pilkington's top article generates over 90500 views. to your Favourites.