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There are many factors that can affect your credit card interest rate but there are three that have the largest effect on the interest rates that you are given.  Everyone that uses credit cards or are thinking about obtaining a credit card should have a basic knowledge of how credit card products work and learning what you can do to ensure that your credit card interest rate remains low is the best way to save a great deal of money and maintain an excellent credit score.

Credit History

One of the most important factors in determining an individual’s credit card interest rate is the individual’s credit history.  A person’s credit history creates an account of all the times that the individual has made a late payment on one of their credit accounts or missed it completely.  This is an indication of your level of responsibility to the credit card company and how much of a credit risk you will be.  The higher the risk of lending to you, the higher the interest rate that they will charge you will be.  Late and missed payments show up on your credit report for as many as seven years after the actual incident and the only thing that can erase it is the passage of time. 

Length Of Credit Profile

Another factor that may affect your credit card interest rate is the length of time that you have owned credit cards or other credit accounts.  Credit card companies tend to reward long term customers by lowering the interest rates on their credit cards.  There are two different ways to obtain a lower interest rate based on the length of your credit profile.  In some cases, the credit card company will decide to lower your interest rate because of a routine review of your credit card account, but in other cases the interest rate was lowered because the account holder called the credit card company to request that their interest rate be lowered because of the length of time they have had the credit account and their ability to keep their account current.

Percentage Of Credit Used

The third factor that influences your credit card interest rate is the percentage of available credit that you are using at the time of opening a new credit card account.  A household that uses more than 30% of their available credit is considered a credit risk and will be given a higher interest rate than households that use less of their available credit.  When it comes to getting the best credit card interest rate, understanding credit cards and the way they work is the best way to obtain the interest rate that you want.