Handling and Understanding Interest Rates

13th December 2006 Author: James Banks

Nowadays banks are creating new beneficial policies to draw people into their programs. People start to think banks are just changing in order to help people. This idea may be right, but this new change costs and therein lies the trick. A few months after someone signs into the credit card service, the interest charges start increasing without anybody informing the clients. When you start paying high interest charges which range from 17% to 21%, you realize that the benefits do not come free of charge.

The average interest rate in the US is 17%.

Will the bank lower my interest rate?

It may sound like an optimistic issue, but banks are known for their strict laws and politics. But it is worth trying.

- Some people succeed in convincing the bank to lower the interest rates, but you will need to be very persuasive and even a little intimidating to achieve this goal.
- You can always request the bank to lower the interest rates. If not, simply close your account and change banks.
- Remember to read the contract fully when opening a new account and make emphasis on the fine print. There you will find all the tricks and future surprises.
- Business should be more careful when opening bank and credit card accounts because these could become a burden instead of an advantage. The former will make you weak in front of your competition.
- Banks are constantly competing against each other in order to draw as much attention as possible from businesses. Once you sign in you become a profitable customer and because of this, banks will do anything to keep you, even lower interest rates.
- You have to be very cautious whenever opening a credit card because when you get a debt from this credit card, the initial interest rate will be the used to charge you.

How much will you save?

There is no standard amount of saving. If you succeed in getting your bank to lower your interest rates, you could go as low as 10%. Since the average interest rate in the US is 17%, you will be able to save a lot by only paying the remaining 7%.

You will save depending on:
- The owed amount
- The monthly payment

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