Two Important Things to Consider for Low Interest Rate Cards

21/11/2011 17:10

Everyone looking to get a credit card would like to get a card with a low interest rate. This is of course desirable as it would make for lower payments. It should however be noted that in most cases low interest rate cards are mostly reserved for persons having a very high FICO score or high paying job. Not to worry, regardless of your financial status there are cards with fairly low interest rates to suit your situation. Before making your decision on a card there are a few things that you will need to be aware of:

 


 

Interest Rate

The interest rate for credit cards is called the annual percentage rate or APR, and before choosing a card you check to see the APR being offered and also the type of APR. This can either fixed or varied; in the case of fixed APR the rate may change but you have to be informed before the change takes effect. The variable the rate is dependent on the prime rate which is controlled by the Federal Reserve. As a result, whenever the prime rate increases so does your APR and vice versa. The best credit card application option for you would be a fixed APR; variable APRs are only beneficial when the prime rate is low.

Introductory Period

Many cards tend to advertise an introductory period during which you receive an APR of 0% or at a very low rate with a lasting duration of between 6-15 months. While this may seem very attractive, when choosing between credit cards, persons will also need to consider the APR after the introductory period has ended. As a result when comparing cards, consider also the interest rate after the introductory period is over. Many cards will have APR as high as 20% and so this should also be considered.

When applying for your low interest rate card, it is very important that you shop around and compare cards. You should consider the APR, the duration of the introductory period if one exists and the APR being offered during this period.  Consider everything as a whole and then choose the card having the features which suit you best.

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