What are “Teaser Rates” on a Credit Card?

“Teaser rates” (also known as “introductory rates” and “promotional rates”) are just that: low annual percentage rates (APRs) that are used to entice people to apply for a certain credit card. Unfortunately, these rates may not last long.

Most teaser rates expire and revert to a higher rate after six to 12 months. Specific policies are set by a credit card issuer. As a result of the 2009 CARD Act, teaser rates must be in effect for at least six months.

It is important to read the disclosure box on credit card applications to determine what the interest rate will be after the teaser rate expires. Teaser rates are also contingent upon timely bill payment. If a payment is late, a teaser rate will often be replaced immediately by a higher interest rate.

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