Variable interest rates on credit cards move up and down according to an interest rate index that must be disclosed in the "Schumer box" that is required on all credit card application forms. Typically, variable rates are calculated with a formula such as "[name of index] rate + 6.99%." For example, if the quoted rate is the prime rate + 6.99% and the prime rate is currently 5%, then a credit card's variable rate would be 11.99% (5% + 6.99% = 11.99% APR).
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