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Understanding Credit Card Interest Rates and Finding the Best Mortgage Services

At O1ne Mortgage, we prioritize your financial education and well-being. In this article, we will explore the intricacies of credit card interest rates and provide you with actionable steps to secure the best rates. Additionally, we will introduce you to our top-notch mortgage services, designed to help you achieve your financial goals. For any mortgage service needs, feel free to call us at 213-732-3074.

Is There a Maximum Credit Card APR?

With the Federal Reserve raising interest rates multiple times between March 2022 and May 2023, the average APR on credit cards has seen a significant increase. As of Q1 2023, the average APR stands at 20.92%, up from 14.56% in Q1 2022. This rise in interest rates may leave you wondering if there’s a cap on what you can be charged. Unfortunately, there is no federal law that limits the interest rates credit card companies can charge in general. However, active-duty military service members and their dependents are protected under the Military Lending Act, which caps interest rates at 36%.

What’s a Good Interest Rate on a Credit Card?

A good interest rate on a credit card is typically one that falls below the national average. As of Q1 2023, the average credit card interest rate is 20.92%. It’s important to note that credit card APRs often fluctuate with changes in the federal funds rate, which can impact both new and existing card accounts.

How to Check Your Interest Rates

To ensure you’re getting a competitive APR, it’s crucial to check the interest rate you actually pay on your credit card or are offered on a new card. This information can be found on your credit card statement or new card offer, often displayed in a graphic called the Schumer box. This box shows APRs and other charges associated with your card, including your purchase rate and the rate you pay on balances carried over month to month.

Other Factors That Affect Your Rate

Your credit card interest rate can be influenced by several factors, including:

• Credit score: Cardholders with better credit can qualify for cards with lower APRs.
• Promotional rates: Some cards offer special limited-time promotional interest rates on balance transfers or purchases.
• Penalty APRs: Late payments can trigger penalty interest rates that are much higher than your card’s usual APR.
• Cash advance rate: The APR you pay on cash advances may be higher than your regular purchase rate.
• Secured vs. unsecured cards: Secured credit cards typically have higher interest rates than unsecured cards.

How to Find the Best Interest Rate on a Credit Card

If you’re in the market for a new credit card, shopping around can help you secure the best APR. Follow these steps to get the information you need:

1. Check Your Credit

Good credit can help you secure the best interest rate on a new card. Obtain copies of your credit reports from all three credit reporting agencies—Experian, TransUnion, and Equifax—by visiting AnnualCreditReport.com. You can also check your FICO® Score for free from Experian at any time.

2. Compare Cards

Using an online search tool can connect you with multiple credit card offers based on your credit profile. Compare the top credit cards matched for you, considering factors like cash back rewards and low intro APRs.

3. Read the Fine Print

Before signing a card agreement, look for the Schumer box and read the fine print to understand how your interest rate is calculated, whether you’re entitled to a promotional interest rate, and other details that may affect your APR.

The Bottom Line

Rising credit card interest rates can be frustrating. To mitigate the cost of carrying a balance, consider paying down your credit card debt or exploring a debt consolidation loan. Although interest rates on personal loans are also high, they are typically lower than credit card rates.

If you’re looking for a new card with a more favorable APR or a personal loan to consolidate your debt, start by checking your credit report and credit score. Improving your credit score over time by making on-time payments and reducing your credit utilization can help you secure better rates.

Contact O1ne Mortgage for Expert Mortgage Services

At O1ne Mortgage, we are committed to helping you navigate your financial journey. Whether you’re looking to secure a competitive mortgage rate or need assistance with any mortgage service, our team of experts is here to help. Call us today at 213-732-3074 to discuss your needs and find the best solutions tailored to you.

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