Credit Card Guide

What is a Delinquency Credit Card Rate?

11 August 2010 by CreditCardsCo™

Before one is able to understand what delinquency credit card rates are, it is important for one to have the knowledge of how credit card and interest rates work. A credit card is a temporary short term loan that is offered by various financial institutions which allow you to purchase products and services on credit. What that basically means in layman terminology is that you can end up buying products and services that you can pay for at a later date. There is one thing to keep in mind however with buying products and services on credit which is that you will be required to pay interest on top of the capital that you have used.

Depending on which credit card that you decide to opt for, the lending company will offer a monthly credit limit that you are required to stick by. What that basically means is that in any given month, you will not be able to exceed that particular amount in purchases. This is usually controlled by your credit card declining transactions if your limit is being exceeded. The interest rate that you are expected to pay on your monthly expenditure is more commonly referred to as an APR. This is a fancy term for interest rates for those of you what are wondering.

If you are a person that is known to make early or timely payments on your outstanding debts with your credit card company, the APR that you are expected to pay is known to be quite low. However, for what ever reason if your payments are late, the APR rate then is known to increase quite drastically. In some cases the rate is known to increase by up to 29%. The difference in APR rate between paying on time and paying late is usually referred to as delinquency credit card rates.

When applying for a credit card from what ever financial institution, these facts and figures will clearly be stated in the terms and conditions of the application form. Even though many people tend to over look the importance of such documentation, one can not stress enough how important it is to read the fine print. If you feel that you do not have the financial knowledge to understand what each and every part of the contract states, there are a number of ways that you can over come this problem. One of your options is to get a financial advisor to have a look at your credit card agreement as they would be able to explain what each part exactly means. The other option is by getting your own legal lawyer to take a look.

It is very important that one familiarizes themselves with all the clauses and terms before committing themselves to any form of agreement. If you are still unsure about any information in regards to delinquency credit card rates, you can always visit your local bank branch where they would be happy to provide much more information in regards to this matter.

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