Other Free Encyclopedias » Online Encyclopedia » Encyclopedia - Featured Articles » Featured Articles: American Idols Tickets - How to Score American Idols Tickets (and How Not To!) - Where to Find American Idol Tickets to Meet Singles Free - How to Meet Singles Free

Low Rate Cards - Low Rate Credit Cards - Annual Percentage Rates, Low Rate Cards

Options and Issues to Consider

apr balance pay term

With interest rates and annual fees rising on many credit cards, more people are looking for low rate credit cards. For both those who do not have extensive credit history and for those with good to excellent credit, several options are available for these low rate cards.

Annual Percentage Rates

Before applying for any credit card, it is important to know what the annual percent rate (APR) of that card is. In short, the APR is the amount of interest you will pay on the charges you make in a year if you do not pay it off in full each month. The average rate for a credit card is somewhere around 15% to 17%. Different rates can make for substantial differences in both the time and amount that it will take to pay off a credit card balance. For example, if you carry a $8000 balance on a card and make a $200 payment per month, then a card with an 18% APR will take 360 months and over $11000 in interest to pay off. If you have a 9% APR, then it will take 218 months and $3345 in interest to pay off. Therefore, while it is best to pay off a credit card balance every month, if this is not possible, then it is important to try and find the lowest APR that you can.

Low Rate Cards

When looking for a low-rate card, a good option for many is a limited term 0% APR card. Some of these limited term 0% APR cards include the Capital One VentureOne Rewards card, the Chase Freedom Visa, and the Citi Platinum Select MasterCard. For those who expect to pay off a credit card balance within one year, then these kinds of cards are a great option, because they allow you to pay down a balance without accruing additional interest charges. Many of these cards allow you to transfer a balance from another card and pay it off without further interest. However, if you miss or are a late on a payment with one of these cards, then you will often be charged interest on your balance and you may be subject to interest charges on your entire balance transfer. These cards are often available to those without extensive credit history.

Many of the cards with a 0% introductory interest rate also have a fairly low long-term APR. For example, the Citi Platinum Select Mastercard could have a long-term rate of about 11.99%. However, it, like many low rate cards, has a variable APR. If you are looking for a low rate card, be sure to read the fine print about your interest rate. If you have not established a good or excellent credit rating, then you will more than likely have a higher APR on variable rate cards.

In the long-term, if you expect to regularly or even occasionally carry a balance on your card, then holding one low APR card is better than than regularly transferring your balance to limited-term 0% APR cards, since many of these cards charge a balance transfer fee. But getting the best long-term APRs usually requires excellent credit. For example, the Simmons First Visa Platinum has a long-term APR of about 7.25%, but it only available to those with the best credit ratings. Other cards with rates in the 10% to 12% APR range are usually available for those with good credit.

When used responsibly, credit cards can be a great tool, but when used irresponsibly, can they can cause financial ruin. However, finding a card with a low rate APR can be a great help toward the wise use of a credit card.

Low Auto Loans - How to Get Low Auto Loans [next] [back] Low Credit Loans - Low Credit Loans—A Primer - Unsecured Personal Loans, Secured Loans

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or