Tommy fisher

Glossary of ticker symbols

What's this about 'interest rates' and percentages? Glossary of ticker symbols

Rubberball chicago artist

The interest rate is a way of determining how much you're paying for borrowing money on your credit card. It's stated as a percentage of the outstanding balance on your card, usually as an APR or annual percentage rate. The lower the APR, the less interest you're paying on the amount you owe. chicago artist

Chicago artist: Okay - so why would anyone choose a credit card with a high interest rate?

Rubberball: Most people don't CHOOSE to pay a high interest rate. The bank decides what interest rate it will charge you, usually based on how much of a 'credit risk' you are. They determine that by looking at your history of paying bills. If you've got a history of paying bills on time, then you'll qualify for lower interest rates. If you haven't ever had any bills to pay, or if you've had trouble paying your bills, that will show in your credit history, too. Since it's a little riskier to lend you money, banks will charge a higher interest rate.

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