How to Get a Low Interest Rate Credit Card

Ever ended up paying more on a low-cost purchase due to your credit card interest rate? Well, what I have come to realize with credit card rates is that not every deal that sounds good turns out to be exactly that. There are times I have ended up paying up to even four times the cost of a purchase, and in this hard economic times, that doesn’t sound sweet to any hard-working citizen like me. As such, the importance of low interest rate credit cards cannot be overemphasized. However, the trick is normally in how to get a credit card that its rate is actually low as you expect or see it in the various offer adverts.

Experience is a very excellent teacher, and years of it have taught me to always look beyond the promotional material that is normally peddled by the different credit card bureaus. My tips for getting a good credit card might not be the type you that your professional financial adviser will give you, but nevertheless, they are in touch with the true picture on the ground. So here are my major steps towards achieving that goal.

Step 1: Do You Qualify for the Credit Card Offer?

This should be your starting point before you can evaluate any offer. I personally do not have such a high credit score –but the only consolation is that I am not alone at such times when we are all fighting to fix our budget deficit. Many credit card bureaus give first priority to people with a very healthy credit record when it comes to low rates. However, some companies are having to dance to the market tune and offer the low rates to people who have a very poor score, because apparently, this is the financial situation  that many people are finding themselves in currently.

I normally like scrutinizing the annual rate on a given credit cards offer to see if what I am being offered is real. It is the first step in getting a good deal, and if you blunder at this stage, then chances are that you are in for a very raw deal. And the deal might even not be present in the first place in order for it to be raw, and in this case I am talking about scams. Yes, you might claim to be so smart that you cannot fall for these scams, but remember that such culprits are always getting smarter every day. Never assume anything and let your guard down.

You will probably have to talk to your bank, right? Then let me let you in on a little secret, banks and many other financial institutions will not disclose to you the hidden costs on a deal until you pressure them to so. Nevertheless, they are still the best placed to give you the information you need. Just be inquisitive enough and ask everything you need to know.

Step 2: Understanding the Interest Rates

This is the best part, and the lower the rate, the better for me. What about you? I guess we are reading from the same script. But do you know what is actually entailed in the APR –Average Percentage Rate? As much as it might be a sweet APR for you, understand that it is an average, and almost anything can be hidden in an average, including cats and dogs clamped together. Nevertheless, an average rate gives you a hint of how much cost in terms of credit card fees that you will incur on your card. To be smart, do not also be average in your reading, but get to the blue print to know the facts.

Breaking the APR further, you have the fixed and the variable APR. Sometimes, the credit card company will not state clearly which one is being provided for in their offer. But if you ask me, I will not hesitate to recommend the fixed rate credit card with an APR that is mouth watering low. On the other hand, the variable APR varies with the prime rate which is normally not controlled by you, but the Federal Reserve. When the prime rate figures are nasty, then bet your variable rate will be nastier. The reverse can be good, but such situations are now hard to come by. So there you are with your second step in getting a low interest rate credit cards, and that is, give a fixed APR priority over a variable APR.

Step 3: Arm Yourself with Your Credit Score Facts

The credit bureaus have been mandated to furnish tax payers with their credit reports annually for free. That is welcome news, but unfortunately, your credit score is not included in such a report, unless you sign up for this. Assuming you sign up for all the major three credit bureaus, so how do you stay updated with your score? This is how I go round the issue.

I normally sign for the bureaus to send me my score at intervals of four months, but each of them once per year so that I don’t end up paying more. That way, my FICO score stays updated quarterly! Smart, isn’t it?

Armed with a good score, you stand to get a good credit card deal. Generally, a higher score means that you stand to get a better credit card deal and vice versa.

Step 4: Shop Around, Looking for fine Details

Do I need to tell you that you have the internet at your disposal to do this? I guess not. However, knowing your credit score will help you select the best offer available for your case. The four major categories on a comparison page for various bank rates are excellent, good, average and bad credit, based on your score. Also, remember that the more you apply for credit, the more you increase your likelihood of dropping on your score. Last but not least, never forget to read the terms and conditions section, because that is where the details are.

Having gathered all the above facts, you can now know how to get a credit card with a rate that best suits you.