Credit cards & interest rates
The below content is meant to be informational and not used as financial advice.
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Those crazy interest rates.
A few weeks ago, I was paying for purchases in a retail store and was asked if I wanted to apply for their credit card. I said I wasn’t interested, and the cashier replied, “Good. The interest rate is 30%! Can you believe that?!”. I think I mumbled something like “that rate should be illegal”, but then started to wonder…what am I paying on the cards already in my wallet?
Turns out I have a T.J.Maxx credit card with an interest rate of 29.99% and a JCPenney card at 28.99%. Yikes.
Retail vs. Financial Institution
My T.J.Maxx and JCPenney cards are retail (or store) credit cards – and after some research, I found that many offer one standard rate for everyone who’s approved. They also have variable interest rates which means the rate can be subject to changes.
Cards from financial institutions typically have a range of interest rates that are based on your creditworthiness. However, all the ones I looked at were also variable. And the minimum rates are still pretty high.
What conclusion did I come to after all this Googling? Well, if what you’re specifically looking for in a credit card is a low interest rate, you’ll have a hard time finding one (introductory offers aside).
The Oxford FCU Visa Credit Card
I have one other credit card in my wallet. An Oxford FCU Visa.
OFCU, like other financial institutions, offers a range of interest rates for credit card accounts based on credit score: 6.9%-17.9%*. Our highest rate is basically the lowest you’ll pay on a lot of cards. Oh, and our rates are fixed. They won’t change as your credit score or market rates change - or when the Fed decides to implement another increase.
There are certainly other things to consider when choosing the credit card that is right for you – rewards, annual fee, charges, etc. We can talk about those another time. When it comes to interest rate though? The OFCU Visa card really is a great option.
So, I have to ask - do you know what interest rates are lurking in YOUR wallet?
*The Unsecured Visa interest rate is determined by credit score and can be as low as 6.9% annual percentage rate, calculated at the periodic rate of .575% per month. The maximum interest rate is 17.9% annual percentage rate, calculated at the periodic rate of 1.492%