How do credit card companies determine their aprs?

Credit card companies determine their APRs based on credit history of the applicant and prime rate in the economy.  Prime rate refers to the rate that is currently being given in the market.  Since credit card companies compete for consumers to have a card through them, they have to offer competitive rates that are current within the market.  Credit history also plays a factor because if your credit history report is poor, you will liekly be offered a higher interest rate so that the credit card company receives interest back if you can't make the payments on the card.

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