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.
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.
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