We know that it isn’t cheap to own a credit card and pay for its interest, especially when you use it frequently. The good news is that once you have a credit card, you can use your credit score to open up big opportunities in your life. Big life purchases like apartment rentals, cars and homes are often bought with the requirement that your credit score be at a certain level. Without a credit card to begin with, the possibility of getting these things is quite low.
But what does one do when their credit card processing rates begin to increase? Why does this change happen, and what can you do to try and alleviate this extra charge? To learn about this topic in detail, our payment solutions company at Payeex have come up with some important information in our blog post below.
The Reasons
There are a number of reasons as to why your credit card rates can increase, and it’s important to know about each one so you can better figure out why this is happening.
1. There Have Been Changes in Interest Rates
One of the main reasons why your credit processing rates can increase is because benchmark interest rates and prime rates are often on two sides of the same coin. The federal reserve has influence on how the prime rate increases.
Since the interest rate on a card reflects the overall interest rate in general, credit card interest will increase if the prime rate is increased.
2. Missed Credit Payments
This change in interest is likely the one that most people are familiar with, but it’s important to take note of regardless.
If you miss any monthly payments on your credit card, your overall interest will increase as a penalty. This change in interest most commonly takes place if you haven’t paid off your credit for over 60 days total. This increased interest rate will apply to any future purchases as well as to any outstanding balances. To avoid this, be sure to pay your credit card off on time and periodically throughout the month.
3. The End of a Promo Rate
If you obtained your credit card with a promise of an initial, promotional rate, chances are this promotion will stop eventually and as a result, your credit card interest will rise. Many promotions offer affordable, low interest rates for up to two years, but once the promo is over the rate will return to its original amount stated on the contract.
What To Do
While you can’t completely get rid of these changes, it’s important that you keep an eye on your statements every once in a while to ensure no costs go up or change to affect your plan. If you really want to you can try and negotiate with your credit card company in hopes that they can do something to alleviate these extra charges. While this option can be challenging, we believe it’s always worth it to try, especially since every situation is different.
How We Can Help
If you have been looking to find the perfect payment processing company for your businesses, look no further than Payeex. With our high quality services, assistance and products, it’s never been easier to bring your business to a place of ultimate success and brilliance. To learn more about our credit card processing solutions, be sure to call our staff at (905) 947-9818 today!