Last week, Capital One made interest rate changes to several personal and business credit cards. Most US credit card interest rates are based primarily on the Prime Rate plus a margin, while some others are based off the London Interbank Offering Rate (LIBOR). Most Capital One credit cards now have a non-indexed interest rate.
A non-indexed interest rate is determined by the issuer and is not tied to any financial index like the Prime Rate or LIBOR index. As a result, cardholders of Capital One credit cards may or may not see their credit card interest rates adjust with the common financial indexes. Cardholders may find their cards having higher or lower interest rates than other issuers with comparative credit cards. These non-indexed rates are also neither fixed nor variable.
Always compare credit cards and evaluate the primary use for which you will be using your credit card. In the case of individuals or businesses that pay their balances in full each month, choosing a credit card with an indexed or non-indexed interest may be of less importance than other factors. Be sure to read the full terms and conditions of each credit card before choosing which card is right for you or your business.
