Credit Card Interest Rates

How to Get a Lower Interest Rate on Credit Cards

One of man’s greatest inventions is the credit card. By just using a piece of plastic, you can buy groceries, buy a plane ticket, shop, eat in a posh restaurant or do anything you fancy. It is the apex of human ingenuity applied in the field of finance and daily living and it symbolizes the purchasing power of the modern man. However, very few people realize that it is also a very expensive financial tool. It would be most ideal for people if they can get a lower interest rate on credit cards.

The most expensive credit facility

Credit Card Interest RatesUsing as a credit card will cost the cardholder loads of money in the form of high interest rates. The credit card is a form of unsecured loan that usually charges higher interest than car loans and other loans that have some sort of security. The creditor has no control over the amount that the cardholder will purchase by using the credit card.  It is because of the fact that the card holder has a freehand in using the card that financial difficulties start to brew. When hard times come, credit card holders tend to use the card more to make up for the lack of income being experience, unwittingly driving up the cost of living.

Controlling the Use of Credit Cards

It is therefore wise to control the use of credit cards to manageable levels in order not to suffer from the consequence of high interest costs that follow. Some groups of people have a lifestyle that makes it hard for them to control the use of their credit cards.  If you belong to this category, your only solution is to find a way to obtain a lower interest rate on credit cards. The best way to do this is to negotiate with the company that issues your card. It is not hard to transact with credit card companies because they are always accommodating to their clients.

Negotiating with the Credit Card Company

If you notice that the use of your card has significantly increased, you should make an appointment with your credit card company and negotiate for a reduction in interest charges. You have to make a quick survey of the prevalent interest rates of various loans in your locale so you can negotiate better.  Ask the company for a lower interest rate mentioning the fact that you have substantially increased the volume on your credit card.  Most credit card companies will acquiesce to such requests because they value the high volume of business generated by their credit cards.

Other Options are Available for the Cardholder

You should not lose hope if the credit card company will not consider your request. There are other ways to get a lower interest rate on credit cards.  One way is to reexamine your lifestyle and see if you can get rid of some extravagant expenses that you don’t really need. Another way is to transfer your balance to another credit card company that offers lower interest rates on their cards.

Approved and Rejected Applications

Why Was My Credit Card Application Denied?

You are very excited! You have applied for a credit card and you are now ready to charge that vintage bag to your much awaited card. All the while, you have assumed that it will be delivered after weeks of application. But your impatience looms after several weeks; and upon checking with the company, you finally heard what you least expected: “I’m sorry, your credit card application has been denied”.

You are left with questions hanging on your mind but no specific reasons are given by the credit issuer. This so familiar circumstance is being encountered by many credit card applicants. If you’re still wondering why you are rejected, below is a list of the most common reasons:

  • Approved and Rejected ApplicationsInsufficient information supplied. The application form you are filling in is very vital and will be used as the main reference; it is highly advisable that you carefully check on your forms before submitting them. Apart from this, required documents such as identification cards and financial records must be complete. Missing and incorrect information will likely be a basis for your rejection.
  • Financial status. Income requirements vary among different card companies. There are those who only require a minimum but there are companies who even check on the borrower’s work history to justify that they can consistently pay for their loans. If you have a very low income or an unstable job, there will be a great possibility that you will be denied.  
  • Bad credit report. If your financial record states that you haven’t paid for your long standing loans or if your loan balances are too high, your chances of being approved is very slim. Pay for your outstanding debts first before applying to clear out your credit balances.
  • Several credit cards. Over access to too many credit companies will make lenders think if you are still capable of paying another one. Always remember that credit companies offering multiple cards will not approve individuals who have already been using one of their cards. Furthermore, applying for several cards will make you look over stretchy who badly needs an overdraft account to cover for your debts. 
  • Charge-off. This is a credit card balance that is not paid for six months or more. This will pose a negative picture on your credit report since this is a declaration that your existing card company cannot collect payments from you. This will thus be a factor for your rejection.
  • Very limited borrowing experience. There is a risk of non-acceptance if you haven’t used any lending facilities before. Not having a credit score will not prove your history of managing your debt and will not assure the credit companies that you are responsible on paying off bills and debts on time.  

It’s really frustrating to have your card application disapproved especially if you have spent time comparing and finding the best credit card for you. If you have recently been rejected considering your good credit standing, it will be timely to check your file to know what has affected your unsuccessful application.

Credit Card Interest Rates

What Is a Good Interest Rate on Credit Cards?

Credit card interest rates usually presented as APR or Annual Percentage Rate is the fees paid for spending money that in normal terms, users cannot immediately avail of. Although all credit card companies offer interest rates, there are still numerous who are overcharging. This article will present details on how to identify good interest rates a company may offer.

  • Having a good credit score will let you avail of lower interest rates. Generally, a 10% interest rate cards are reasonable enough but there are still some who offers a rather lower rate. One of the requirements to qualify is a way above the average credit standing. If you are not sure of your credit points, you may browse several sites which offer credit card computation for free.

In addition, those with secured credit are ensured of having the base introductory offer of about 6% while those with less than perfect credit score will be able to avail of cards having 10% to 30% rate. Individuals with low credit points can still avail of a good interest card from a credit union. It allows its members to apply online and gives a 9.9% to 12% APR.

  • Credit Card Interest RatesCredit cards have rewards programs attached to them and comparatively, those with these programs charges higher interest rates. However, companies with rewards cards however should only have at its lowest, an interest rates ranging from 10.99% – 19.99%.
  • Good interest rates are also dependent on the person’s location since the APR varies from country to country. In US for example, the APR ranges from 6% to 40% whereas in UK, it ranges from 18.9% and above.
  • Good credit card interest rates should be standard. There are credit card companies which claim to offer 0% fixed rate to acquire applicants when the truth is this is only for 6 months or 1 year. Unfortunately, there are also those companies which impose hidden charges for every transaction made on the card and these add up to the interest rate.  There are also companies which impose different rates for each transactions; this is acceptable as long as the rate imposed is clearly specified on the terms and conditions.
  • A good interest rate offering does not totally mean a superior credit card. There are cards with higher rates but are very flexible on giving its consumers with lots of cash back, flier miles and discounts. Generally, these high rates are meritorious given the enumerable perks you can get. Contrastingly, there are also companies offering low interest rate but consumers are given exorbitant fees for over usage, frequent cash advances, and the like. 

Having credit cards is not totally disadvantageous if a person will just be aware of the fine prints attached to it. Interest rates of credit companies vary and this should be a main factor in choosing the best card suited for your needs. Being insightful and inquisitive of all the rates included on your billing statement might save you a lot of charges and may result to a very good credit score.

What is the Lowest Credit Score?

What is the Lowest Credit Score?

Generally, in the credit world, it is hard to define the lowest credit score.  It is due to the fact that lenders view credit scores differently.  For some, your credit score may be high, while for others, it is just average.  Though FICO can provide the range from 300 to 850, it will mainly depend on how lenders, banks, credit card companies and other financial institutions will judge your credit score.

What are the general interpretations of credit scores?

Lenders set up few guidelines on how to determine if one’s credit has high risk or low risk.  Most lenders or creditors consider scores above 620 have an average or good risk.  While account holders who have above 700 credit score have a very low risk and scores beyond 760 is the lowest risk based from formation of scores of FICO.

Who is getting the lowest credit scores?

Obviously, those are people new to credit, those who don’t own a credit card or any other financial accounts.  Next, those who have accounts handled by collection agencies have delinquency records and may have filed for bankruptcy.

How long will I have the chance to improve my credit score?

Immediate attention and action is needed.  It is advisable to review your credit report, to check any possible errors, to make sure everything is properly reported to credit bureaus.  A credit score is the sum of all the information we have on our credit report.

How can I view my credit report?

Once a year, major credit bureaus are sending credit reports for all consumers for free. Once received, take time to review the information because for any errors you find, you have the right to dispute it.  We can’t let a single or minor error pass because it can hurt our credit score.

The set of information you can find on a credit report include;

  • What is the Lowest Credit Score?Contact information- name, both present and previous addresses, contact numbers, etc.
  • Credit summary- this will include the total number of financial accounts both previously and currently you have, like loans and credit cards.  This includes also the total amount of debts you owe.
  • Public records- though not all consumers have public records.  This section shows information issued by the government or federal court like bankruptcy, tax liens, judgments, foreclosures, etc.
  • Credit inquiries- credit inquiry has 2 types, the soft and hard inquiry.  These inquiries are either made by an account holder or made by lenders who viewed your credit report to assess your credit worthiness before they approve your applications for getting a new loan or credit card.
  • Account History-  this shows the major information regarding all your financial accounts including name of lenders, balance information, payment details, status of the account, etc.

With all these information given regarding formation of credit scores, we are already aware what makes it or break it. It helps us to understand the importance of credit information that can lead to a very low score.  Having the lowest credit score doesn’t mean it will stay forever on that level because it will depend on us; how we pursue a change to improve or even get the highest credit score possible.  No one achieves it without effort because it is a continuous process that needs a lot of hard work and discipline.

Credit History

What Is a Hard Inquiry on My Credit Report?

A Hard inquiry is a specific type of credit inquiry. This is in relation to a consumer’s credit report and score. This article will discuss several important aspects regarding the same.

Credit Inquiry

Realistically speaking, any entity i.e. corporation, person, bank, lender, etc. can pull out your credit reports. Most consumers are not aware of this, but their credit reports get checked numerous times without their knowing it. More often than not, these are from entities that have something to sell and want to see if the consumer pre-qualifies for their “promotional offer”.

Soft Inquiry

Any credit inquiry that was not expressly authorized by the consumer is a soft inquiry. This means that it should not be included in a credit report in the first place. And, even if it does, it should not be considered in calculating the credit score. Why? This is because the consumer had no control over the actions of the inquiring entity. In some cases, the credit bureau should not have even provided the information.

Hard Inquiry

Credit HistoryAny credit inquiry by any entity that has your EXPRESS authorization. This usually means in writing. Some consumers are not even aware that they have already signed an express authorization. This is because the same is included in the terms and conditions, is an oversimplified “check box”, or the consumer was just not paying attention.

As a general rule, any application for the facility of credit will involve you signing a waiver. This includes personal loans, auto loans, home loans, application for insurance, application for utilities, application for a mobile phone, credit card application, checking account application, etc. In fact some employers pull out credit reports for individuals who are applying for a highly confidential or finance related position.

Whenever you sign anything that involves you applying for something, ask the representative if the waiver includes the pull out of your credit reports and if they will pull out your credit reports. While you are at it, ask what credit reports they will pull out. If they say, they may or may not, it usually means they will.

Important Tips to Remember

A popular myth is that credit inquiries will ruin your credit score. In reality it can lower your score but only by a few points. Unless you lack credit history, and do not have various types of credit available (i.e. checking, credit card, loans, etc.) the same is not too significant.

There are however instances wherein checking the credit inquiry section of your credit report can help you earn a few points back. First, if you are sure about every express waiver you made, and there are hard inquiries listed on your credit report that you did not authorize, you can dispute the same. Second, if you see a credit inquiry that is already more than 2 years old but is still reported, you can dispute the same.

You can dispute the hard inquiry online, on the phone, or by writing a dispute letter. Make sure you address the letter to the credit bureau that listed the information on its credit report. The contact information can be found on the credit report itself.

Credit Card Rewards

Best Credit Card Rewards Programs

Now is the best time to get a new credit card because companies are giving away lots of rewards when you sign up for a new card.  The rewards given away range from free cash, free airline tickets, free merchandise and many other perks they can think of offering to their clients. These are real bonuses that you can use and enjoy when you sign up for credit cards. You can have all these if you have a credit score that qualifies you to sign up for a new credit card. Credit card companies offer different sets of bonuses and perks and it is up to you to choose which one offers the best credit card rewards programs. The following are some of the companies and a brief rundown of their offers.

Credit Card Rewards1. Capital Venture Card – For people who travel a lot, this is the card to have. It offers reward points amounting to around 2% on all travel-related expenses which the cardholder can redeem and pay for his hotel bills, airline tickets, and other travel expenses. There are no requirements imposed when the rewards points are redeemed. The cardholder simply pays for the current bills using his accumulated bonus points. It offers a 100-dollar signup bonus and is one of the cards that offer the best credit card rewards programs.

2.  Blue Cash Everyday – This card from American Express is what you should have in your hand if you are a great spender and have an excellent credit record. It offers 3% rebates on your first $6000 purchase in stand-alone U.S. supermarkets and 1% for succeeding purchases. It also offers 2% cash back on gas purchases from selected filling stations and all purchases from specified major department stores nationwide. The rebates come in the form of statement credit which can be redeemed through the Reward Dollars plan. There are no other requirements like minimum purchases or enrollment to the bonus offers. You are entitled to $100 dollar cash bonus when you spend at least 1,000 dollars on the first three months.

3. Chase Freedom Visa – This is another cash back credit card issued by JPMorgan Chase.  It offers a remarkable 5% rebate for all your quarterly purchases in selected rotating categories like groceries, gas, travel, department stores, movies, restaurants and the like, which can translate into big savings if you plan to purchase in bulk.  It offers a 1% across-the-board rebate on all other purchases. It gives a 100-dollar cash bonus on the first 500$ you spend.  It does not charge annual fees.

4. Bank Americard Cash Rewards – Cards with the best credit card rewards programs usually have excellent cash back offers.  This card offers a 100$ cash bonus on your initial qualifying purchase and does not charge annual fees. You enjoy a 2% cash back bonus on grocery purchases and 3% cash back on gas purchases if you spend a combined 1,500 dollars purchases per quarter for both gas and groceries.  The card also offers 1% cash back on all other purchases.

Credit Score

What is a Soft inquiry on My Credit Report?

A soft inquiry is a form of credit inquiry. This shows up on a consumer’s credit report. Below are a few things you should know regarding the same.

Credit Inquiry

A credit inquiry is a situation wherein any entity pulls out the credit report of another. The same is resorted to in order to determine the application of a consumer. It is also resorted to in order to determine whether or not to qualify a consumer for a promo, offer, insurance, employment, etc.

Soft inquiry

Credit ScoreRealistically speaking, it is easy to pull out the credit report of a consumer. In fact most of the time, the consumer is unaware that a product or service provider, or even a potential employer has just pulled out his/her credit report. As a general rule any credit inquiry without the express consent of the consumer is considered a soft inquiry.

Hard Inquiry

A hard inquiry is one made with the express consent of the consumer, even if in most cases, the same is unaware that the report will be pulled. This is because some consumers do not read carefully the terms and conditions of whatever it is they are signing or whatever online box they are “clicking” or “entering” or “ok”, etc. As a general rule, hard inquiries have been initiated by the consumer. This is because they applied for something. This can be a credit card, a bank account, a loan, insurance, employment, etc.


This is a case of several hard credit inquiries. This usually happens when a consumer shops around for a loan, insurance, employment, credit cards, etc. The law recognizes the reality that consumers will shop around for a loan. Therefore credit inquiries made by related entities within a short span of time, usually a week or two, is considered 1 hard inquiry. The others are simply not considered like a soft inquiry.

Below are examples of SOFT inquiries:

  • Scenario 1

A cable company or other utility companies pull out reports on consumers within their network. The goal is to see which consumers are within their target demographics.

  • Scenario 2

A cell phone provider pulls out the credit reports of their existing clients to see which to consider for a promotional offer, an upgrade, prepaid service alerts, etc.

  • Scenario 3

A scammer tries to pull out your report in order to see if you are susceptible to identity theft or credit card fraud. Of course the scammer pulls the report under the semblance of a legitimate offer.

  • Scenario 4

A credit card company pulls out your credit report to see if you have other credit cards. This will aid them in determining whether or not to offer you a credit card or not.

  • Scenario 5

You go to an auto dealership to shop for a car. You made general inquiries, and left your calling card as a courtesy. You did not request pre-approval for a car loan. The representative went ahead and pulled out your reports anyway. This may be because of a mistake or intentional. Regardless, you did not sign anything and did not give authorization for them to look at your credit report.