To choose the best low-interest credit card offer, start by checking your credit score. Credit cards with low interest rates typically require good or excellent credit for approval. Next, decide what you will use your low interest credit card for – everyday spending, a big purchase or a balance transfer. That will tell you what type of credit card interest rates to focus on.
How to Choose a Low-Interest Credit Card:
If you want to reduce the cost of existing debt, focus on the balance transfer APRs – both introductory and ongoing – as well as balance transfer fees when comparing credit card offers.
If you want to finance a large purchase with the new card, apply for a general-purpose credit card that has a 0% APR period on purchases. Many cards offer at least 12 months of no interest. It’s much better than deferred interest, which is a feature of many store credit cards.
If you want a card that won’t charge much interest on the rare occasion you carry a balance, there are some credit cards that offer rates below 12% to people with good or excellent credit. But it’s still best to pay off everyday expenses in full each month, so it might be worth using the Island Approach, i.e. multiple credit cards that work for different types of purchases.
Whatever reason you have for seeking out a low-interest credit card, it’s important to remember that carrying a balance on a credit card can be a slippery slope, even at a low interest rate. And if you have a 0% APR credit card, don’t wait until the end of the intro period to figure out how to pay off your balance. Use a credit card payoff calculator to plan your payment amounts ahead of time.
To get a low-interest credit card, you’ll need good credit or better, and you’ll want some idea of what you’re going to use the card for. That will determine which cards you’re likely to qualify for and which interest rates you should focus on when comparing offers. For example, you might be able to get a 0% introductory APR, or you might want a low regular APR. And you might be better off with a low balance transfer rate than a low purchase APR, if you have existing debt.… read full answer
So, start by checking your credit score and figuring out how long you expect to need a low interest rate, in addition to what you need it for. Most credit card companies offer low interest rates, at least to some applicants for certain cards. But finding the right fit for you can be difficult at times.
How do you know what APR you’ll get?
As a rule of thumb, the best credit scores get the lowest APRs. But all interest rates on credit cards are not created equal. Credit cards offering a low- or no-interest intro period will grant you the advertised intro APR as long as you’re approved for the card. But beware – those intro APR periods are usually followed by high regular APRs, and that’s the APR you’ll be stuck with.
Most credit cards advertise their regular APRs as a range: 15% - 25% (V), for example. That means your assigned rate could be as low as 15%, as high as 25%, or somewhere in between. And the “(V)” indicates the rate could change over time as economic conditions evolve. The exact interest rate you’re given (from within the advertised range) will depend on your credit history, income, and debt – your overall creditworthiness.
Unless you apply for a card that has a set regular APR, rather than one advertised as a range, you won’t know exactly what regular APR you’ll get until your application is accepted. As a result, it’s best to consider both the high and low ends of the range when comparing credit card rates, even if you have good credit. The average regular APR for people with good credit is still nearly 21%, and credit cards that require a minimum of good credit for approval commonly have APRs that range from 16% to 25%.
If you’re worried about winding up with a higher regular APR than you’d like, there are still a few ways you can go about paying less interest. With some cards, you can avoid regular APR altogether for a set period of time.
Using a 0% APR period to pay off debt
If you have an existing debt and need a break on interest to pay it down faster, look for a 0% balance transfer credit card. Most 0% APR balance transfer credit cards charge a balance transfer fee, which is a percentage of the amount you transfer. In this case, a balance transfer isn’t totally free. That said, there are cards with no balance transfer fee and 0% APR periods, but they’re not common.
Using a 0% APR period to finance a large purchase
If you’re looking to make a big purchase without paying interest, you’ll want a credit card with a 0% APR intro period on purchases. The intro period will allow you to pay off a hefty purchase without paying an extra dime, as long as you pay it off before the intro period ends. Interest will apply to any balance remaining at that point.
Using a low-interest credit card as a safety net
If you simply want a low-interest credit card to have one just in case – of emergency car repairs, surprise medical bills or other situations where you won’t be able to pay the bill in full right away – look for a card with a low APR range, or one with a single rate listed. Most credit cards offer APR ranges rather than a single rate, and you can’t just assume you’ll get a rate at the low end of the advertised range. But the better your credit history is, the more likely that will be.
If you already have a high-APR credit card, a better option might be to try calling your credit card company’s customer service line to ask for a lower regular rate should the need arise. If you make a good case, citing your good and/or long history with your card and the company, you may get offered a lower interest rate.
Hi! Yes! It is definitely worth calling and asking them. You may need to make more than one call until you get a person who has the authority to make that change, but it can't hurt to call and ask. I'd do a bit of research first to see what the interest ranges are that the credit card company operates in so that you know where you might fall. You could also send an email or letter to ask.… read full answer
You also might want to see if there is a format or form provided online by your credit card company to request a lowered interest rate – that site will provide specific information to help you succeed in your request.
I feel as if it never hurts to ask for discounts and good deals. Many of us shy about doing this - I often am - but if you can get your courage up and try, you may be successful. Good luck to you!
Finding the right credit card can be stressful, with so many offers to consider and so much jargon and fine print to decipher. But as long as you follow these simple pointers, you’ll be fine.
Compare credit cards before applying. Otherwise, there’s no way of telling whether you’re getting the best deal. Marketing can be deceiving, after all. … read full answer
Make sure your credit is match. You should only consider applying for a credit card if it matches your credit standing. For example, don’t apply for an excellent-credit credit card if you have fair credit. Getting turned down will only make it harder to get approved the second time around.
Don’t apply in bulk. You should not submit more than a couple credit card applications within a short period of time, as this can lead to a roughly six-month dip in your credit score.
For more tips, check out WalletHub’s guide on finding the right type of credit card for your needs. And for your convenience, here are some benchmarks to consider as you wade your way through the credit card comparison process:
Market Snapshot: 1,000+ Credit Card Offers
You can learn more about the average terms offered by credit cards in popular categories from WalletHub’s latest Credit Card Landscape Report.
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