Credit Cards with Huge Interest Rates

The card Act of 2009 has been passed, but you may wonder why there are still credit cards with huge interest rates. The reason behind this is that although the Act was put in place to protect consumers, it does not look into the subject of interest rate in itself. It does, however, prohibit creditors from setting high fees and penalties for the customers. It also addresses consumer complaints regarding unexplained increase on the balances APR. 

Calculating Interest

Interest rates are among the most difficult issues that debtors face today. With the passing of time, interest rates also get higher. This makes it even more challenging for a person to repay his dues. When determining how much your interest rate will be, lenders will take into account your credit score. You will notice that your friend may not have the same APR as you do. If he has lower interest rates and even enhanced deals, you can guess that he has better credit.

The interest is calculated by your creditor each day using a simple formula. They take the outstanding day-to-day balance on every purchase you have made and add it to special balances, cash advances and other unpaid interest (if any). Then they multiply the total with the daily interest rate of the card. Daily interest is obtained by simply dividing the APR by 365.

High Interest Credit Cards

There are different types of interest. These include purchase, balance transfer, cash advance, and special interest (for promo transaction offers, transferring balances to another institution, and the like). Some cards have high APRs on cash advance but have low interest on purchase and balance transfers. Others, however, have high APRs.

Below are some credit cards with huge interest rates:

• Applied Bank® Unsecured Visa® Gold Credit Card – Aside from the hefty annual fee that hikes up to $180 for the second year of card ownership, the interest rate of Applied Bank® Unsecured Visa® Gold credit card is also very high. Conversely, the credit limit is very low with only $500. 
• Hooters MasterCard® - This is a rewards card for the loyal customers. Though you get five points for each dollar you spend, the APR and the annual fee eclipse the incentives program. 
• First Premier Bank MasterCard® - This credit card is loaded with charges. The APR is almost 60% and fees go over $120. Prior to that, the bank also issued a credit card product that had nearly 80% interest rate. After the bad press though, the sub-prime credit card was discontinued. 
• Best Buy Credit Cards – The retail credit cards issued by HSBC and Chase have high default interest rates. What’s worse is that they climb higher as time progresses. Despite that, there is a grace period so it is best that you pay off everything you owe to avoid getting smacked with huge interest rates. 
• Applied Bank® Gold Match Plus™ Visa® - This card is a combination of secured and unsecured credit card. You have to make a security deposit to open an account but Applied Bank® guarantees that you will get twice the amount you deposited as your credit limit.  The APR may not be higher than the other cards in this list but it does not have a grace period. The annual fee is enormous and there is a monthly maintenance fee as well.

      As much as possible, steer clear from credit cards with huge interest rates, especially when you are prone to emotional spending. Such cards can lead you to debt. Look, instead for cards that can help you balance your finances, such as low interest credit cards with no annual fee.