In this day and age, the primary goal of the consumer is to obtain a credit card from a company with a good interest rate. It can be almost impossible to locate one that has a 0% APR, and when you finally do, the rate eventually reverts to the high standard rate. So this leaves you at exactly the point where you started from. You may be wondering how these credit card companies come up with these interests rates anyway.
Calculating Interest Rates
It is a common question most consumers ask when it comes to credit cards, the annual percentage rate. Banks use a variety of different factors to calculate the APR if you are applying for a loan or a new line of credit.
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Credit Score: The first thing a lender is going to look at when it comes to giving you credit is your credit score. This score helps to determine your reliability and ability to pay back the loan and no go into default. It is crucial that you keep up with your credit score at all times, especially when you are seeking out new credit.
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Interest Rates: Another factor a lender will consider is where the level of interest rates stands in the Federal Reserve Bank of the United States. Inflation levels as well as the stock market can also play a big role in the APR you are offered.
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How much you borrow: A lender is also going to consider the amount you want to borrow to configure your APR. It will also depend on the terms of your loan and your current relationship with the lender. If you have a good relationship with your current bank, it is best to stick with them when it comes to obtaining a loan or new credit line.
Be Careful!
It is important to remember not to apply for too many credit cards at once. Make sure you are doing extensive research and narrow it down to just a few before applying. If your credit is less than perfect there are ways that it can be repaired. Try not to apply unless your credit score is up to par.
If you are looking to eliminate credit card debt in New York City there are many ways to go about this. Visit various websites and learn about possible services that could help you eliminate your debt for good.
