Low Interest Credit Cards - Low APR Credit Cards
Low APR credit cards are a great way for young people to establish a credit history. These cards often have high interest rates if you carry a balance, so it's a good way to build good habits and pay the card in full. Want to learn more about low-interest/low APR credit cards? Get helpful tips & advice from our experts.
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Who Should Consider Low-Interest Credit Cards
The best thing you can do when you get your credit card bill is pay it off and in full immediately. But let's face it, that's not always possible. Emergencies happen, and so do impulse purchases and poor financial planning, for that matter. They happen to the best of us. If you're not able to pay your balance in full, then you are going to have to pay interest on the unpaid balance. So if you anticipate being in that situation from time to time, then a low-interest credit card could help you pay less in interest charges.
If you're in the market for a credit card with a low interest rate, there are some important questions to consider. Back to top.
Why Are Rates Low(er) on Low APR Credit Cards?
Credit card interest rates -- also known as an APR or Annual Percentage Rate -- are determined in part by your credit score. Generally speaking, the higher your credit score, the lower your interest rate. But some credit cards -- generally those geared toward people with better-than-average credit -- often have lower interest rates. Conversely, cards geared toward people with poor credit usually come with higher interest rates.
What's the Best Way to Use Low-Interest Credit Cards? As noted earlier, the best way to use any credit card -- low interest or otherwise -- is to pay off the balance in full every month. Going over your credit limit or paying your bill late will result in fees and can damage your credit. If you have to carry a balance for a period of time, aggressively pay down the balance as quickly as you can. The longer you carry that balance, the more you will pay in interest, low APR or not. Back to top.
How to find the best low APR credit card?
First, you'll want to search for a credit card for which you are likely to qualify. Credit.com's free Credit Report Card provides an easy-to-understand breakdown of your credit standing, along with your free credit scores. It will also match you with credit cards for which you are likely to qualify. You can also use a credit card comparison tool, like this one, and filter the results to show only low-interest credit cards. Once you have your results you'll be able to compare interest rates as well as any associated fees and other features. Back to top.
Given the sheer number of options out there, picking a credit card can seem like an incredibly daunting task. There are so many different types of credit cards, geared to different types of consumers, knowing where the decision making process can be a real challenge. The truth is that if you keep a few important principles in mind, choosing a credit card doesn't have to be stressful ... nor does it have to be a crapshoot. So let's get started.
Know Your Credit Score Before You Apply for a Credit Card**
Knowing your credit score before you apply for a credit card is important, because particular credit cards are developed for consumers who fall within a particular credit score range. Here are the five generally accepted credit score ranges.
- Excellent Credit (750+)
- Good Credit (700-749)
- Fair Credit (650-699)
- Poor Credit (600-649)
- Bad Credit (below 599)
What this means is that someone with a credit score of 640 shouldn't be applying for credit cards meant for people with excellent credit, because he or she will likely be denied, and if you apply for too many credit cards at the same time, your credit score could suffer. Back to top.
How to Compare Credit Cards
In order to effectively compare credit cards you'll want to use a tool, like the credit card comparison tool on Credit.com, but you'll also need to know what to look for. There are a couple of key indicators.
- APR - This stands for Annual Percentage Rate and it represents how much you'll be changed for carrying a balance on your credit card. If you carry a balance of $100 for a year, and your interest rate is 10%, then you'll be charged $10. These rates vary based on your credit score. The better your score, the lower your rate is likely to be.
- Fees - Credit cards may have a number of types of fees associated with them. Annual fees, late fees, over-limit fees and loyalty fees are just a few. You'll want to make sure you understand which fees, if any, apply
- Rewards - There are lots of kinds of rewards credit cards available - cash-back rewards, mileage rewards, travel rewards and more. It's important to play close attention to the terms of the rewards programs, so you can compare them accurately.
Tips to Consider When Applying for Credit Cards
If you're not sure what your credit looks like, and, as a result, what kind of credit cards you should be applying, you can use Credit.com's free Credit Report Card for an easy-to-understand breakdown of your credit history, along with your free credit scores. If you see something that doesn't seem quite right, you are entitled to a free copy of each of your three credit reports once a year, and you can check them for inaccuracies, and ask the credit bureaus to correct them. Back to top.
*For complete information, see the terms and conditions on the credit card issuer’s website. Once you click to apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While Credit.com always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
**FICO scores and credit scores are used to represent the creditworthiness of a person and may be one indicator to the credit type you are eligible for. However, credit score alone does not guarantee or imply approval for any credit card offer.