Credit Card Terms - Floor

Floor term when talking about credit cards doesn't mean you hit the floor when you see the balance on your credit card.
Floor means the minimum possible interest rate on a variable rate credit line or loan. This floor rate is set by the credit card company as the minimum annual rate.

Typically credit cards with variable rate are tagged to price rate and it fluctuates up and down. But if the Feds cut the prime rate drastically the interest rate of a card with a floor does not go past that floor interest rate figure.

Note! Credit card act of 2009 final rules that were released on Jan. 2010 include a new rule that will not allow credit card issuers to set "floors" as to how low their credit card interest rates can go.

For more information about the new Credit card act of 2009 and the new rules - click here - for 1155 pages of documents.