Teaser rate

A teaser rate is an initial low-interest rate offered to entice borrowers to take out a loan or credit card. This rate is typically available for a short period at the beginning of the loan term, after which it adjusts to a higher standard rate for the remainder of the loan. The teaser rate strategy is employed by lenders and credit card companies to attract new customers by making the initial terms appear more appealing. Often, borrowers may refinance or transfer balances to take advantage of lower rates before the teaser rate expires. During the teaser rate period, borrowers can benefit from reduced payments and establish a payment history, but should be prepared for higher rates as the initial offer ends.