Low Interest Credit Card Rates On New And Current Consumer Cards–Why Banks Are Offering More Affordable Options

Low interest rates on credit cards have been in the news lately due to the fact that more banks are beginning to offer low introductory rate on cards in order to attract new consumers into the credit card market, as more financial institutions feel that a wider range the borrowers may now be in a position to handle credit card use properly, but there are also indications that current cardholders may see a drop in their credit card interest rate in the coming months. There were reports that credit card rates had increased slightly, then there were also some predictions that new cards may become more expensive, but there are some factors which are attributing to possible lower rates for cardholders in the near future.

Again, new credit cards are being offered at low introductory rates, in many cases, but there are those who feel that many issuers may begin increasing rates after these intro periods have expired, due to the fact that the CARD Act has put restraints on many banks when it comes to increasing interest rates.  Yet, there is also a provision that many feel will lead to rate declines in the coming weeks or months as servicers must reevaluate a customer’s account every six months.

According to CNNMoney.com, Bank of America decreased rates for some of their consumers last month and it is reported that lenders like Discover, Wells Fargo, and even J.P. Morgan Chase may begin decreasing rates for certain customers. It needs to be understood though, this is not an automatic decrease for all cardholders, but as part of the CARD Act’s rules for reviewing a cardholder’s account, those who have been in good standing and have continued to acquire a more positive credit history could be in line for a rate reduction, despite predictions and evidence that rates have increased slightly over the past months and may rise higher after new introductory rate offers expire.

These potential rate decreases for cardholders who have been pursuing a positive credit history and implementing smart financial practices may be short lived though, as there are analysts who feel that even with these reviews being conducted by many top lenders, and subsequent requirements for reviews of cardholders, continued reductions in interest rates may not be seen, even if a positive credit history and score remains present in the life of a cardholder.

Some feel that these rate reductions may only be seen by consumers who have a higher than normal interest rate on the card, but who may have been able to build a better credit history, yet as time goes on and cardholders remain in a positive credit position, subsequent decreases in their rate may not be seen. However, there are also advisers who believe that any losses that these banks may sustain in reducing interest rates as a result of the CARD Act will be made up in other areas, like checking accounts or debit card fees. For this reason, advisers say not only should new credit cardholders be wary of any increases that may come on their card after an introductory period has expired, but customers may want to also look for any fees that may be associated with other accounts with their particular financial institution.