Credit Cards with Low Interest | An Expert Guide
Low APR cards can help you save money, if you're carrying a balance each month. Generally, you need to have good to excellent credit to qualify. Below our experts highlight the different types of low APR cards available, including when it makes sense to apply for cards with 0% introductory rates vs those with ongoing low rates. Click on the images below to get specific advice from our experts.
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What To Look For When Applying
If you are looking for the lowest interest rate possible, carefully inspect the terms and conditions of the cards you are considering. These terms are always found in a standard format known as the Schumer Box. You should examine both the card's standard interest rate and any penalty interest rates that may apply. Rather than displaying a single standard interest rate, many cards will show multiple rates or a range of possible interest rates, with the exact rate given based on the cardholder's credit worthiness. In these cases, you will only receive the lowest interest rate offered if you have excellent credit.
What To Avoid When Applying
Having a credit card with a low interest rate is of vital importance if you incur interest charges by carrying a balance. When shopping for a card with the lowest interest rate, you should avoid reward credit cards, as they will always have a higher rate than similar products that do not offer rewards. In addition, if you are struggling with debt, you should also avoid credit cards that offer rewards as they can give you an incentive to spend more money. Finally, you should be aware of your credit history and credit score, and not apply for low interest rates that you are unlikely to qualify for.
Should You Apply For More Than One?
In general, applying for multiple low interest rate credit cards may not be beneficial to you. Applying for several accounts will ding your credit score. In addition, if you're looking for a card with a low interest rate, you are unlikely to receive a significantly lower rate from one card issuer over another, so you are best off simply choosing the single lowest offer you can find. Once your credit history improves significantly, then you can request a lower rate on your existing card, or apply for a more competitive offer.
When Is The Best Time To Apply?
If you carry a balance, then you should be using a card with the lowest interest rate possible. The better your credit history is, the more likely you are to be approved for a credit card with the most competitive interest rate. For example, using up a large percentage of your available credit may lower your credit score. If your credit score falls below an issuer's requirements, it can make it harder for you to be approved for a new card with the lowest available interest rate. While it's important to find the best way to pay down your debt, also make sure your credit score will meet the issuer's requirements before you apply.
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