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Credit Card Interest Rates

As of 2005, credit card companies appear to be paying 0% annual membership fees and no annual fee for all their online payments. But if you’re using the internet to make purchases, your card issuer’s stance on interest rates is questionable.

Over the last year, interest rate increases have been issued for balance transfer cards, balance transfers, new credit cards and any other forms of debt incurred through direct mail, phone or online transactions. Consumers are still paying high rates of interest for credit cards that are still accepted at established banks, mortgage, loan companies and many other financial institutions. The issue is whether card issuers are using the services of a credit card company to offer shoppers low interest rates.

Many cards have changed their policies since 2000, offering consumers very specific zero percent interest on balance transfers and new credit purchases. That practice is still called ‘globalization’, in reference to the rise in global trade.

But in recent days, the interest rates on balance transfer credit cards have been raised. In a sign of growing consumer interest about low interest rates, the Federal Reserve on April 7 raised the interest rates of all revolving credit lines to ‘zero’. This came after the Federal Reserve had raised the ‘equity’ limit of some revolving liability lines, including the ‘prime loans’ that are issued to people and businesses for which borrowing is likely to be extremely expensive.

If you are considering transferring your credit card balance from one card issuer to another, see the section entitled ‘Paying Off Bad Credit’ in this brochure.

Disclosure: I have no positions in any stock that are mentioned, and Schroedinger’s Penguin Group, Inc. is only to the entity TSX: TRICARE.

I wrote this article/work to educate, not to spot, relationships, legends and scams. I have declared these facts: ANNOUNCEMENTS, DECIDING WRITTEN AGreements and OTHER ENERGY EFFECTS ARE PERJECTS. CREDIT RATINGS ARE DEFINED. CREDIT LIMITATION IS THE DUEEST THING CAN’T BE AGEDICITED BY DOOR THREAT.

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In Summary

Credit card issuers cannot promise consumers lower interest rates or a zero APR:

1. They don’t.

Unions, merchant associations and credit card companies all need to know clearly that the APR on an item is usually determined by a few factors: the amount of the money involved in the sale and its cost; the credit limit on the card; the amount of money charged (if any) to the card; the financial status of the customer; and the way of paying the customer. The same holds true for balance transfers and new purchases.

2. They never promise you lower interest rates.

The only rules they can promise consumers are 0% interest on balance transfers and high-risk purchases until they act.

Credit Card Fraud

Sometimes credit card fraud is unavoidable. But you’ll need to be extra cautious if you’re carrying your credit card balance around. Here are a few tips on how to protect yourself when you fall victim to credit card fraud:

Get A Copy Of Your Credit Card Account.

Before reporting to a credit bureau, a credit card issuer will require your credit card information. This is usually located on your credit report. Look for two things:

1. The card number that’s being requested; or

2. A small padlock symbol, usually, next to your credit account or somewhere on your finger, on your credit card. Do not open the padlock unless you are going to use it.

Keep Your Credit Card Account Numbers A Secret.

Keep your personal information separate from your credit accounts. Don’t give it out to anyone unless you need it. And never give out your credit or bank account to anyone over the internet unless you specify the name and address of the bank you’re handling the transaction with.

If you use your phone to call a number, write the number down in plaintext, or write a couple of numbers, like a 90-day urgent message. When the number rings, make sure the number is legal to use, and use only one – at a time. In some situations, this is the only way the credit card issuer will know the account number is being used. For others, this is not the security that takes any account number other than yours.

Never give out your credit account number without first verifying the security of the number.