We have created a new information page where you can find out what the prime rate is, what it means for you and your credit card bill, and how you can research what the going prime rate is and how to get it on a card that you want to use for personal or business use.
Most credit cards use the “prime rate” method to rate their credit cards for the consumer. This means that they base the lowest rate off of the going prime rate that the Fed has set forth, and they make it variable, depending on ensuing economic conditions and other factors that can make this federal rate bounce up and down so quickly.
Much like a variable rate mortgage, this can be incredibly beneficial to the consumer, or it can be incredibly unfair. That is why you have to go into getting a new credit card with your eyes wide open as to what you are getting in to.
When the rate goes up, you may find that your minimum payment goes up beyond what comfortably fits into your budget, so this can definitely put a dent in your monthly allowance for certain bills.
On the flip side, when the prime rate goes down, you may find that your monthly payment goes down, especially if you don’t pay if off every month.
Whatever the case may be, please read more about prime rate credit cards and how they work.