The reference rate (reference rate) generally corresponds to the Euribor (European Interbank Interest Rate), which is the reference rate of the interbank currency market and is the result of the average prices offered by a number of European banks. Customers can choose different deadlines, the most common is Euribor with 3, 6 and 12 months; For example, a 30-year home loan may have a fixed interest rate for the first five years and a variable rate indexed to Euribor for the remaining 25 years. To measure the total cost of the loan to the customer, the annual percentage interest rate should be used to compare different offers with the same time and repayment terms. A credit card issuer must notify you 45 days in advance before increasing their interest rate on new purchases. The company cannot increase your price for new purchases in the first year after opening your account. For variable rate bonds, the benchmark rate may be LIBOR. Some variable rate bonds also use the yield on 5-year, 10-year or 30-year U.S. Treasury bonds as a benchmark rate and offer a coupon that is somewhat larger than the yield on U.S. Treasuries. Variable rate credit cards have an annual percentage (APR) linked to a particular index, for example. B the premium rate. The policy rate most often changes when the Federal Reserve adjusts the federal funds rate, resulting in a change in the corresponding credit card rate.

Interest rates on variable rate credit cards may change without notice to the cardholder. Variable rate credit cards can change interest rates without informing their customers. Home loans can be granted with a variable rate, a fixed interest rate or a mixed interest rate. An alternative to LIBOR is the PrimePrime Rate The term “Prime Rate” (also known as Prime Lending Rate) refers to the interest rate that large commercial banks count on the loans and products of their most highly rated customers. in a country. The premium rate is used as a benchmark rate for auto loans, mortgages and credit cards.