Where are the Credit Cards with Low Interest?
I often wonder why people claim that their credit card interest rates are so high these days. I simply have issues in trying to recall an epoch where credit card rates have in fact been low. The national average and rate of credit card interest has always been somewhat high. The average credit card rate used to hover around 20%, give or take as a ballpark figure. Back in those days if had a bit of luck, you could locate offers well below that particular mark, and indeed you still can. The General Accounting Office ran a survey in 2005 and the outcome stated that around 80% of the 6 major card companies cardholders were sporting cards with less than 20% APR. This is actually not so bad considering all the negative publicity the credit card industry has received over the years. With this in mind, credit card rates are actually not so very high these days. Still, in this day and age there are credit cards available that have interest rates as high as 30% and fees as high as $39.
This concept and the current state of things reflects back to the early 80s when Risk Based Pricing was born"Risk Based Pricing" grew into it's own. This system generally permitted card companies to promote cards with lower basic costs and associated fees to cardholders that were not credit challenged while extending more fees to the less credit worthy cardholders to cover the difference. In any case, for various reasons including changes to a firm's inner dynamic to changes in policy, this system does change. A result of this is that people who are more credit worthy are left covering the shortcomings of this model when persons of less than perfect credit do not help to meet the profit expectations of the credit card company when they don't pay their due amounts. This leaves the credit worthy customers with low interest rate credit cards to foot the bill.
Generally, in accorance with the bankrate.com website, credit cards that contain low interest tend to be represented in what is called the Platinum Card National Rate Average"Platinum Card National Rate Average". Even though fixed rates have pretty much been stable as of late. Recently they did dip down to below 10 percent in early 06, but the variable platinum interest rate has jumped to over 13 percent from 11 percent since 05. Judging from simple interest rates alone, it would make simple sense to avoid variable platinum rate cards to begin with and just stick with fixed rate ones because at no time during the past several years was it any cheaper at all to have a variable rate card based on the National Averages.
It only makes sense the deciding differences would be perks that come included with most adjustable rate offers. It just seems obvious that it is a fact that credit card rewards are deserved for being charged too much interest in the first place.
About the Author
A lifelong resident of Las Vegas, Nevada, Sam Donaldson is the current staff writer for http://www.credit-cards-with-rewards.com/ .
Tell others about
this page:
Comments? Questions? Email Here