You Probably Don’t Know Your Credit Card Interest Rate
Think about the credit cards in your wallet right now. Will you be able to get a reward for each of them? What about interest rates: can you list them? It turns out 38% of us don’t know our credit card interest rates, according to Nerdwallet’s 2019 Consumer Credit Card Report .
Half of the respondents to the Nerdwallet survey do not pay their entire balance every month. On top of that, 44% don’t know what is a reasonable interest rate for their credit rating. When we consider getting a credit card, we tend to place a little more emphasis on rewards than interest rates.
Of course, you don’t think you need to worry about the interest rate. You are going to pay off the balance in full every month! But these smart plans can easily go awry, leaving you in debt and paying much more than you planned thanks to the high interest rates.
Interest rates continue to rise
Interest rates have risen over the past five years from an average rate of 12.74% in 2014 to 17.14% this spring. If you look at the last 20 years , interest rates are the highest right now.
As we mentioned earlier, paying off debt is one of the best ways to protect your finances from the effects of a downturn in the future. If you have a balance or think you might need it someday, check your credit card terms for your interest rate. Since many credit card interest rates are volatile, they may change slightly over time; when you pay a bill or look at your statement, it’s time to make sure you know your rate. This knowledge will help you make the right decision about which card to use if you need to write off funds for an unexpected purchase or in some kind of financial situation.
And if you have a good reputation, it might be worth making a phone call and asking if you can lower your interest rate . Just because the average is 17% doesn’t mean he has no chance of getting better.