When comparing credit cards with low or 0% interest rates, it’s important to know both your credit score and how much you can afford to pay toward your debt each month. This will make it a lot easier to tell which low interest credit cards might be available to you and then compare them based on how much each is likely to cost you by the time you pay off your balance. It’s hard to tell whether you should go after a really long 0% APR period, a really low regular APR, or a card that is decent in both categories just by eyeballing your options. But by plugging the relevant rates and fees into a credit card payoff calculator, along with your budgeted monthly payment, it will quickly become clear which low interest or 0% APR credit card is best for you.
With that being said, it’s also important to note that the credit cards with the best rates typically have at least a couple key things in common. For example, they hardly ever charge annual fees. In addition, they usually require at least good credit for approval. Keep reading below to learn more about how to compare offers and get the best possible deal on credit card interest rates.
Financing a big purchase with a 0% APR card
If you’re financing a large purchase, a longer 0% interest period means lower monthly payments, which may help your monthly budget. But sometimes the longest 0% APR period is followed by a high regular APR, especially if you have less-than-perfect credit.
So if you plan on carrying a balance past the zero-interest period (or you think that might be a possibility), make sure to factor in each card’s regular APR when you’re comparing offers.
Transferring a balance to a 0% APR card
Those hoping to transfer an existing balance to a new credit card shouldn’t simply find the card with the longest 0% interest period on balance transfers. You’ll also want to consider the balance transfer fee, which is usually between 3% and 5%. It can end up being a significant expense, and it’s commonly overlooked.
That said, there are cards with both 0% APR on balance transfers and $0 balance transfer fees from time to time. They would be ideal for someone looking to transfer a balance, but such cards are only available to people with good credit or better.
A note about store cards and deferred interest
If you’re considering a store card, or a card from a specific retailer, make sure the 0% APR period is not, in fact, a deferred interest period. Deferred interest isn’t a true 0% interest offer—rather, the interest will accrue from the purchase date and will apply if you slip up. If you make a late payment, or have any portion of the balance remaining on the card at the end of the deferred interest period, you’ll pay every cent of interest that you would’ve paid from the start.
So beware of store cards, and read the fine print. Most of the time, you’re better off getting a regular credit card with a true 0% interest period.
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