Rates - National Guard Family Program

Introduction to Personal Finance
An Overview for State Family Program Directors, Wing Family Program Coordinators, and Families.

Introduction

Evaluating Your Situation

Budgeting & Debt Management

Goals & Plans

Insurance & Disability Planning

BUDGETING AND DEBT MANAGEMENT

2.	Introduction
	2.1	Why Do We Acquire Debt?
	2.2	Debt Can Become a Habit
	2.3	The Reality of Borrowing
	2.4	The Credit Trap
		2.4.1	Fees
		2.4.2	Rates
		2.4.3	Types of interest
	2.5	Eliminate and Avoid Debt
	2.6	Trimming Your Budget
	2.7	Learning Check

2.4.2 Rates

Whatever you do, don’t kid yourself when it comes to those tempting introductory offers. You may think you’re going to pay off that balance in full by the time that low rate bumps up to a frightening 18% APR or higher.

But those institutions are banking on the fact that you won’t.

You also want to make sure that the interest rate touted on the card offer doesn’t only apply to the balance you’re going to roll over. Some card issuers actually charge you two interest rates – one for your transfer balance, and one for new purchases.

Rates can also increase sharply if you’re late on a payment. That’s often a permanent rate change, so if you fall into that trap, you’re probably going to have to change cards altogether.

But you should first give your card issuer a call to see if you can return to the lower rate.