What’s the Average Interest Rate on Credit Cards?

We talk about credit cards a lot like they are the devil. And there is a reason for that. They are often misused, misunderstood, and they also have a reputation for being very opportunistic when it comes to reeling in consumers with their promises of lower rates, fees, and so on and so forth and then jacking them up. However, there are also a lot of reasons why you should have one or two.

First of all, having a credit card is a great way to build credit. For those of you that are in college or right out of high school, this is sort of how you build your credit history. This prepares you for down the line when you are ready to buy your first home, buy a new car, or make other major purchases where your credit history is looked at to determine whether you are worthy of getting the money for it.

You may need an “emergency” credit card, for when you really need it. Heck, some places won’t even accept checks any more, so having a credit card is really a must, or at the very least a debit card, so that you can purchase the things you need and want with minimum hassle. Looking for credit cards that are a good deal is pretty easy these days with the internet, where you can find lots of credit card deal comparisons. I’d recommend you look at several before deciding on the right one for you. They are literally tripping over themselves to compete for your business, so find the one that best fits your needs and desires.

Credit cards can be great, if you use them right. However, if you use them to do the one thing that is the biggest no-no in finance school, to spend more than you make, then this is where you fall into trouble with credit cards. Especially if you have a high interest card. Low interest rate credit cards are the only kind you should have in your wallet. However, the unfortunate truth is that most credit cards are at least a 14% interest rate.

And that’s just the average. Some of them can get up into the twenties, especially if they are considered “high risk” credit cards for people with bad credit. The unfortunate thing is that those who would benefit most from having a low interest rate don’t because they are “high risk”, and therefore they are offered the chance to have credit with a hefty price. What kind of sense does that make!?