Consumer Comeback Blog

History of Credit Card Rates and APRs

Banks make their money by taking our money into a savings account earning a very low rate of return and then lending that every same money back to us in the form of high interest credit cards. Credit card rates used to closely follow the standard prime rate that was set by the Federal Reserve, but over the past few years most credit card companies have set their own rates in order to earn a higher profit margin. Card issuers have started to increase the spread between the rate they pay savers for depositing money in savings accounts, money market accounts, and certificates of deposit and the rates they charge consumers to borrow with their credit cards. It’s one of the many ways card issuers have raised their revenues during the recent recession.


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