Unsecured credit card interest rates will obviously vary depending upon the type of card and cardholder, but there are some concerns that interest rates on cards in general may rise in 2011 as average rates have reportedly been increasing and could result in cardholders needing to practice more financially responsible credit card habits or those seeking credit cards will obviously need to compare various card offers if they are to get the lowest rate.
According to Bankrate.com, since 2005 credit card interest rates have been increasing on average and, as a result, current credit card offers and those to come in 2011 could be higher than in previous months. Reportedly, card issuers are beginning to loosen their lending practices for both prime and subprime borrowers, in some cases, and for this reason there could be more opportunities for borrowers to find access to credit than in previous months when many lenders have reportedly tightened their standards to a point that limited credit card opportunities.
Yet, some sources say that even if higher interest rates are not seen on cards, the Credit CARD Act has made it difficult for some lenders to increase fees as easily or levy high interest rates through sudden increases, but some analysts feel that introductory fees associated with new credit cards may be higher as some lenders are attempting to make up for restrictions that have been implemented through the CARD Act.
An industry survey conducted by Bankrate.com also stated that averages on fixed credit cards are around 13.36% and 14.41% for variable credit cards, but these are obviously not guaranteed rates as a cardholder may qualify for a much lower rate or, due to their financial position, may only be able to find a credit card with a higher interest rate. However, there are those who feel that looser lending practices on the part of financial institutions do bode well for the future of our economy as reports of not only credit card lending increasing have been present but small business loans as well.
Understandably, consumers are finding, in some cases, that they are on a more financially stable ground and some have begun seeking out credit card sources or using credit once again. However, consumers who do look for new credit card offers may find low introductory rates or an affordable APR on their card, but advisers often have suggested that these individuals be certain of terms and conditions, as well as fees, associated with new cards as there could be an affordable introductory interest rate that may become problematic if a card is carrying debt when the rate increases.
Essentially, credit card interest rates may come at affordable levels for some or remain around average or higher for others, but proper use of credit cards will be necessary for individuals to avoid defaulting or missing payments as, the simple fact that a consumer may have access to credit does not mean they should begin spending haphazardly or beyond their means to repay. While these principles may be common sense for many cardholders, advisers often mention that the key to long-term affordability related to credit cards simply comes from proper budgeting and saving techniques that allow cardholders to quickly repay their debts and manage their credit cards in a way that keeps their charges within their financial boundaries.