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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: WAYHOME studio/Shutterstock February 17, 2021 Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and CreditCards.com, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Bankrate logo The Bankrate promise
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According to the Consumer Financial Protection Bureau (CFPB), . As a result, you can easily look up the rates and fees for your credit card (or one you want to apply for) at any time. Prime rate changes
When you search for this information, you’ll find the vast majority of credit cards have . The Federal Deposit Insurance Corporation (FDIC) explains that these variable rates are based on an “index” of interest rates nationwide, which is not something your card issuer controls. Generally speaking, credit card interest rates are based on the —a national index used by banks to determine consumer interest rates. Since the , your interest rate can go up and down based on moves made by the Federal Reserve. Penalty APR for late payment
Another instance where your credit card issuer might raise your interest rate is when you pay your bill late. If you are more than 60 days behind on your credit card bill, you could get hit with a penalty APR that’s higher than your regular rate. End of introductory APR period
Finally, you may see your credit card’s interest rate go up if you originally signed up for a credit card with an introductory APR offer. There are many on purchases or balance transfers for 12 months or more, yet you will pay the regular variable rate on balances . Is my issuer required to notify me when my rate changes
Here’s the good news about your credit card company raising your rate: by and large, you won’t face any sudden changes in your APR. The (the Credit CARD Act) stipulates that card issuers generally cannot raise the interest on credit cards you’ve had for less than a year. Not only that, but your card issuer is required to give you 45 days notice of any rate increase, which then only applies to balances from that date forward. An exception to that rule comes into play if you’re already late on your credit card by 60 days or more, in which case you’ll have to start paying a penalty APR. However, the FDIC reports that . In fact, your card issuer is required to restore your original variable APR after you make six months of timely payments on your credit card. What to do if your APR increases
Credit card interest you pay does not benefit you in any way and just makes every purchase you make on your card more expensive in the long run. So, if your credit card APR is scheduled to increase, it’s important to take steps to minimize the damage. If your credit card interest rate goes up because you’re 60 days late on payments, you should focus on getting back on track so you can stop paying a penalty APR. This requires you to make six months of on-time payments on your credit card. If you receive notice that your rate is going up due to changes in the prime rate, on the other hand, you have several options to consider. You can: Call your credit card issuer and try to negotiate your interest rate down. Negotiating your card interest rate down is a possibility, and the worst your card issuer can do is say “no.” You can try this strategy by calling the number on the back of your credit card. Just remember that lowered rates are more likely to be offered if you have a long history of responsible credit use and a good relationship with your card issuer. Pay off your credit card balance. You can also just pay off your credit card balance if you have the means to do so. This bold move would help you avoid paying any credit card interest on that particular card moving forward. Consider a balance transfer credit card. You can also look into , many of which offer 0 percent APR on debts you transfer for 12 months or more. Just remember that balance transfer cards charge balance transfer fees, which can eat away at your interest savings. Look into a debt consolidation loan. If you’re not interested in moving debt from one credit card to another, you can also look into personal loans for debt consolidation. considerably lower than credit card rates, as well as fixed monthly payments and a fixed repayment timeline. This means you can consolidate debt and know exactly when you’ll become debt-free. SHARE: Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and CreditCards.com, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more. Related Articles