by Joseph Kenny | 11/6/08

Credit card interest rates can be as low as zero percent when you first get the card; however, all of this is changed after a short period of time such as half a year has passed, and the interest is raised up to as high as, say, forty percent interest. For anyone who regularly keeps an outstanding balance on their credit cards this can be quite detrimental. You might be very surprised one day when your balance goes up substantially due to this higher interest rate and your payments become too high for you to pay on your current pay rate.

Lacking the understanding of card interest rates and penalties can be very dangerous to credit card holders and lead into accruing enormous debt. Teaser rates at the opening of your credit card can be quite tempting to take advantage of but if you aren't responsible enough with paying off your balance on a regular basis at the end of the set period you may be left with much higher rates than you would expect and it may become too much to handle.

Another way teaser interest rates can be terrible is when you believe the rate of interest is zero percent for six or more months and you make a minor mistake like paying late once. Often times the teaser rate of zero percent is nullified when you make a mistake such as late payments and a rate known as a penalty rate is then put into effect. This penalty rate can ruin your plans of getting the balance paid off before interest is charged against any umpaid balance on your card.

Debt is an awful problem today and it is easy to get high amounts of debt simply by not understanding all the rules the issuer of your credit card has put into place. Education is the best defense against accruing high amounts of debt.