How Credit Card Issuers Use the Prime Rate

When you get a credit card offer in the mail that says you are pre-approved, what is the first thing you look at on the letter? The interest rate, right? And when you get an offer from a credit card company after filling out an application either through the mail or online, what is the first thing you want to know? The interest rate. This rate determines how much money you will have to pay for past due balances each month. It can make the difference between paying a few dollars and a few hundred dollars every year.

So how do credit card companies determine which rate you get? And why is it different for different people? Well, the simple answer to the last question is that the better your credit is, the better rate you get. But we