Credit Card APR Statistics

Though rates vary among credit companies, consistently high rates indicate stress on your ability to pay, according to credit card raters. There are several steps to take to protect oneself. Check your credit reports and make sure the information is correct. Make sure any other debt outstanding is current. Reduce your total level of borrowing. Try to pay off the highest interest rate loans first.

Take immediate action to lower your outstanding debt to less than half of the available balance. Make certain you are timely with all your credit cards. Pay off the highest interest rate cards first. Call the credit card company and ask for help or to negotiate the rate downward. They will help if you have credit history and have made at least minimum payments.

Default APR is the rate the credit card company may charge you for being late in meeting payments. It is a penalty rate for not meeting the terms of the credit card agreement. The default APR will apply to all balances on outstanding debt. It is not a temporary rate that will be rescinded when the credit card is current again.

The credit score is a three digit statistical summary of the following factors: employment status, income, debt to income ratio, past payment history, credit lines outstanding, and total debt. These scores are provided through information available from many sources so it is important to check your credit rating often. This is especially true when trying to reduce debt and improve your credit score.

Between 2003 and 2007 Americans who own credit cards increased the net indebtedness on their cards by 30 percent according to statistics by the Survey of Consumer Finances, a triennial study. Nearly half of all credit card users carry revolving balances. The average debt on existing balances increased to an average of nearly $7,800, while the median debt rose from $2200 to $3000.

With credit card rates in the 20 percent range and default rates in the 30 percent range making minimum payments only solves temporary cash flow problems. Interest rate charges amount to between 3 and 4 months of a year's payments.