The Finance Blogger

The only thing worse than the already high credit card interest rates are the short-term payday-type loans. Credit card interest rates start at 18% with some rates going as high as 28 or 29%. If you can avoid using either credit cards as loans or payday loans you can save a great deal of money. The best bet is not to borrow money using credit cards. When using a credit card make sure you have the cash to pay the credit card balance at the end of the month.

Most credit cards work as follows. There is no interest charged on the bills up until the statement date. If you pay the balance at that point in time then there will be no interest charged on any remaining balance.

Credit Cards Interest Rates

Unpaid Balance Triggers Interest Charges

However, if there is an unpaid balance that exists after the due date then interest is charged. It is charged on the full amount of charges from the time when they were charged to the account. And interest will be charged until such time that the full amount is repaid in total. Note that new charges to the credit card will immediately begin accruing interest as long as there is an unpaid balance on your credit card. This can add up very quickly in interest charges to your account.

Why It Takes So Long To Repay

Many consumers wonder why it is taking them so long to pay off their credit card balance. In many cases, they are only paying the minimum payment required each month. The reality is that if the minimum payment is $100, approximately $90 will be interest charges, and $10 will pay off the principal.

At these rates, it will take a very long time for you to pay off your balance. This is assuming that you do not accrue new charges to your account. In reality, most people are continuously charging to their credit cards. The interest will continue to build up very very quickly. Before you know it, your balance will be at the maximum and growing because of the increasing interest charges.

For more articles on credit card interest rates, click here.

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