Large purchases: If your goal is to finance a large purchase, a card with a long introductory 0% purchase APR offer will be your best bet. Keep in mind that at the end of the introductory period, your remaining balance will be subject to the card’s regular APR. You can factor all of this in to determine which card will save you the most money on your purchase(s) with WalletHub’s free credit card interest calculator.
Financing debt: If you plan on reducing the cost of existing debt, check out the best balance transfer credit cards. These will offer long 0% intro periods to finance existing debt and reasonable regular APRs. Keep in mind that most credit cards feature a balance transfer fee that is charged to transferred amounts. There are credit cards with no balance transfer fees, but you will often have to put up with them in exchange for a longer 0% intro APR. Just keep in mind that as with any introductory rate, your balance transfer will be subject to the regular APR at the end of the introductory period. You can use WalletHub’s free balance transfer calculator to see how much a balance transfer could save you.
Other considerations: If your card comes with a 0% introductory period, make sure to pay your balance before the end of it to avoid interest. Otherwise, pay attention to the card’s regular APR and pick a low interest credit card. You can use a credit card interest savings calculator to figure out how much money you can save. If financing purchases or debt isn’t your main goal, focus on the best credit card deals according to your specific needs. You could aim for a rewards credit card that saves you money in your biggest spending categories for instance.
Check your credit score: Each card will have its own credit score requirements, so if you don’t know where you stand, check your credit score before applying.
Picking a low APR credit card will hinge on whether you intend to finance a big future purchase, pre-existing debt, or both. How long you’ll need to pay off a balance will also factor in to your decision as 0% introductory periods can vary. You can use WalletHub’s credit card comparison tool to filter credit cards according to your specific needs and your credit score.
A good APR for a first credit card is anything below 20%. The best low interest first time credit card is the Bank of America® Customized Cash Rewards Credit Card for Students because it offers introductory APRs of 0% for 15 months on purchases and 0% for 15 months on balance transfers, with a regular APR of 13.99% - 23.99% (V). It also has a $0 annual fee and a 3% (min $10) balance transfer fee. But there is a 3% foreign transaction fee. With non-student first time credit cards, it’s hard to find a regular APR below 25% and nearly impossible to get a 0% intro rate.… read full answer
Most first-timers have no credit history, so they need to prove themselves as responsible borrowers before getting a really low APR. But there are exceptions. One way to get a good APR for a first credit card is to apply for a secured card. But because these cards require you to deposit the entire amount they allow you to spend, it doesn’t make sense to carry a balance. You would in effect being paying interest to borrow money from yourself. Student cards also give lower rates, but naturally only to students.
Therefore, the very best APR for a first credit card is one that never affects you. Since you’re unlikely to get approved for a low APR, you should pay your balance in full every month. And if you do that, you won’t have to pay interest. Still, it’s worth knowing what rates are available, just in case.
First-Time Credit Cards with Good APRs:
Bank of America® Customized Cash Rewards Credit Card for Students: 0% for 15 months. 13.99% - 23.99% (V) regular APR. $0 annual fee.
Capital One QuicksilverOne Cash Rewards: 26.99% (V). $39 annual fee.
Capital One Platinum Credit Card: 26.99% (V). $0 annual fee.
Discover It Secured: 22.99% Variable. $0 annual fee.
Capital One Secured Mastercard: 26.99% (V). $0 annual fee.
If you’re in the market for your first credit card, you probably don’t have much credit history, unless you’ve been able to build some as an authorized user on someone else’s card. So you probably won’t get a low APR. As a result, your aim should be to find a card with no annual fee that you can get approved for (rewards are a bonus). Then, pay in full every month by the due date to avoid interest. Paying your bill on time will also help you build credit and graduate to a card with a lower APR.
Low interest rates are better than high interest rates when borrowing money, whether with a credit card or a loan. A low interest rate or APR (annual percentage rate) means you’re paying less for the privilege of borrowing over time. High interest rates are only good when you’re the lender. But that is technically what happens when you put your money in a savings account, checking account, CD or money market account. The rate at which you’ll earn interest from a bank will be indicated as a percentage, followed by “APY” (annual percentage yield).… read full answer
When it comes to credit card interest rates, lower definitely is better (assuming you won’t be paying your bill in full each month – otherwise, the APR shouldn’t matter). In general, credit card interest rates tend to be pretty high compared to the rates charged by most loans. A low-interest credit card is one offering a regular APR under 14%, which also happens to be roughly the average rate for people with excellent credit. Your credit card APR depends heavily on your personal credit standing, and you will need at least good credit to expect even an average interest rate.
Low-interest credit cards are beneficial for people who may need to carry a balance from time to time, because less interest means less opportunity to slide into unmanageable debt. Credit cards with 0% interest periods are better for specific uses, like financing a big purchase or paying off an existing debt via balance transfer, because the 0% APR period will end at some point. Many credit card companies offer 0% APR periods for new accounts, but they often give way to higher-than-average regular APRs.
The fastest ways to improve your credit score are to pay down your balances, dispute incorrect information on your credit report, make more frequent payments, and reduce credit utilization. Credit utilization (how much of your credit limits you use each month) contributes to a portion of your credit score that accounts for 20% - 30% of your overall score. So, an adjustment there can result in a big credit boost pretty quickly. Similarly, you can dispute incorrect information with a quick online request or phone call. You won’t always get an immediate credit score increase, but correcting errors on your credit report is a great place to start.… read full answer
There are a few other ways to increase your credit score quickly, from becoming an authorized user to increasing your credit limit. They may not all be equally effective for everyone, as it can take years to build a consistently good or excellent credit score. In fact, some strategies could send your credit score in the wrong direction before leading to an increase. For example, requesting a credit limit increase can result in a hard inquiry that damages your credit a bit in the short-term, but having more credit available could produce long-term gains if used responsibly.
Here’s how to improve your credit score fast:
Pay down your balances. If you aren’t eligible for a credit limit increase, focus on paying down existing debt. Paying down a large chunk of debt at once will help your credit utilization ratio and bump up your score. If you can’t make a large payment all at once, try to pay more than just the minimum monthly amount. If you have multiple debts, start by making payments on the debt that has the highest interest rate so you can limit interest charges.
Dispute incorrect information on your credit report. You should file a dispute for any incorrect negative info on your report. Once the dispute goes through, incorrect items will drop off your file, and your score should improve. You may have to wait 30 days for the credit bureau to review your dispute before you see any changes.
Make more frequent payments. Credit utilization is calculated based on the statement balance on each of your credit cards. You can reduce these balances, thus decreasing your credit utilization and increasing your credit score, by making payments before the end of each billing period. Then, pay off the remaining balance by the due date to avoid interest charges and credit-score damage.
Become an authorized user. If you’re just starting out, or your credit report has a string of negative marks, a good move would be to become an authorized user on someone else’s credit card and build your credit over time. Just make sure the primary holder is responsible and pays their bills on time.
Add new payments to your credit file. There are new services that can add positive information, like on-time utility payments, rent payments, and positive bank balances to your credit report. Not all of these programs apply to all credit bureaus, and some cost money to utilize, but they could boost your credit score over a few months.
Increase your credit limit. A higher credit limit can reduce your credit utilization ratio, assuming your spending does not increase. The only potential problem is that asking for a credit limit increase usually results in a hard credit inquiry, which would temporarily hurt your credit score a bit. But if you get a credit limit increase without asking, or you have a few months before you need the highest credit score possible, a higher limit could definitely help.
Everyone’s credit situation is different, so not every option will be relevant or available to you. The best way to find out exactly what you can do to quickly improve your score is to check out the personalized advice in the Credit Analysis section of your WalletHub dashboard.
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