Low Interest Credit Cards
How to find a great low interest rate credit card
Every consumer wants a low-interest credit card, but how do you find the best deal amid a seemingly endless ocean of options? Dozens of competing lenders all claim to offer the best deal, and it can seem like you need a law or finance degree to understand the fine print in their offers.
Low-interest credit cards are out there for the taking, and consumers with good credit ratings have the easiest time getting approved for them. If you've got bad credit or no credit at all, the first thing you should do is establish a solid payment history and a pattern of responsible spending.
0 Interest Credit Cards: Fact or Fiction?
Credit card interest rates can dip quite low for qualified consumers, but there is no such thing as a credit card that charges no interest at all without recouping that money in other ways. For example, most low-interest credit cards charge high annual fees as a way of offsetting the money the company's losing in interest accrual.
You should be suspicious of any lender that promises a zero-interest credit card with no hidden fees. This kind of low-interest-rate credit card can be a wolf in sheep's clothing; for example, if you carry a balance exceeding a certain threshold from one month to the next, this can trigger the imposition of very high interest rates or penalties. These cards often wind up costing you more than you'd have paid if you'd signed up for a regular card with a modest interest rate.
Common Features of Low Interest Credit Cards
One condition attached to many low-interest credit cards is that you need to pay your bill in full and on time every month to continue to enjoy the reduced rate. If you fail to do so, a higher rate kicks in, and you'll have to try to convince the credit card company to lower it once you reestablish a flawless payment history. Usually, though, the reduced rate will still be higher than the low rate you had at first.
It is also common for a low-interest credit card to have sliding fees for various transactions. While your actual rate may be low when you make purchases, cash advances are usually charged at a much higher rate, as are balance transfers.
Another thing you should be aware of is that many low-interest credit cards offer an introductory interest rate that rises after a specified trial period. Others, as mentioned, make up for attractive interest rates by imposing hefty annual membership fees.
When shopping for low-interest credit cards, it's useful to find online tools that let you instantly compare the terms offered by various companies. This makes finding the right fit for you much faster and easier.