What is a teaser rate?
Understand the Problem
The question is asking for the definition and explanation of a teaser rate, which typically refers to an initial low interest rate offered on a loan or credit card to attract borrowers.
Answer
A teaser rate is a temporary, low interest rate offered at the beginning of a credit product, intended to attract borrowers, which typically increases after the introductory period.
The final answer is: A teaser rate is a temporary, low interest rate offered at the beginning of a credit product, such as a credit card or adjustable-rate mortgage, intended to attract borrowers. This rate typically increases after the introductory period.
Answer for screen readers
The final answer is: A teaser rate is a temporary, low interest rate offered at the beginning of a credit product, such as a credit card or adjustable-rate mortgage, intended to attract borrowers. This rate typically increases after the introductory period.
More Information
Teaser rates are commonly seen in credit card offers and adjustable-rate mortgages. They are often significantly lower than the standard rates to make the product more appealing at initial glance.
Tips
A common mistake is not carefully reading the terms and conditions, which can lead to unexpected high-interest rates after the teaser rate period ends.
Sources
- Teaser Rate: What it Means, How it Works, Types - Investopedia - investopedia.com
- Introductory rate - Wikipedia - en.wikipedia.org
- Teaser Rate | CENTURY 21 - century21.com
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