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Q: What is the highest interest rate that credit cards charge? What causes the interest rate to be high or low?
A: Usually, credit card companies will charge a maximum of 29.99%, although some have been known to charge as high as 33%. The 29.99% is most often charged when a person has a “less than perfect” credit rating or has missed payments.
Generally, credit card interest rates run between 10.99% and 17.99%. There are some lower rates, such as 0.00%; however, these are usually introductory rates and will go up after a specific amount of time.
Other credit card companies raise their rates according to the prime lending rate. If it goes up, so does interest rates. If you aren’t sure which method your credit card company uses, you may want to ask.
It may seem unusual that a credit card company can charge a higher interest rate than a state itself is allowed to charge, as is sometimes the case. This occurs, however, because the credit card interest rates are based on the interest rates in the state in which the credit card company’s main headquarters is located.
If you want a low-interest credit card, you will need to have a high credit score. The higher your credit score, the lower your interest rate can be. Also, you should compare credit card interest rates and terms. This way you can determine which card company does offer the best interest rates.