What are low interest credit cards ?

| January 25, 2013 | 0 Comments

Low Credit Credit Card

Anyone looking for a credit card should really only be focused on one thing and that’s finding one with a low interest rate. Credit card companies don’t really like the word ‘interest’ and instead label the charge levied for borrowing money the ‘APR’, or Annual Percentage Rate.

When choosing the right card you should aim for one with a low APR, but don’t be seduced by the promise of a zero percent APR (like Santa Claus and the Tooth Fairy, they simply don’t exist). Such offers tend to be limited to balance transfers and/ or new purchases for a limited period of time (say six months). This may be exactly what you are looking for, but make sure that you read the small print before signing up.

Today’s marketplace is awash with a myriad of different credit card deals which cover the spectrum form the sublime to the ridiculous. The best way to untangle this financial cats-cradle is to visit an online comparison site or flick through the ‘money pages’ of a broadsheet. When it comes to credit cards the age old adage that ‘you can’t judge a book by looking at its cover’ never rings more true.

You’ll soon find that cards which are superficially less ‘exciting’ (in terms of additional incentives) are often the ones with the most competitive interest rates. In taking out a credit card you are really only looking to try and maintain an affordable level of debt. They are also useful as alternative payment method whilst travelling or for emergencies. The interest rate is a crucial consideration and it’s this, rather than an endless string of prize-draws, that could save you money.

A low interest credit card would be classed as one that offers an APR of nine to eleven percent, for example: the Co-operative Bank Platinum Base Rate Tracker card gives you a rate of 8.3%, which is one of the lowest around (but a drawback is that it’s only available anyone aged over 25 who already owns another card from a major bank). Competition comes from other card providers who  offer cards with APRs that just reach into double figures. As with all aspects of the financial services industry the only way to guarantee the best deal is to spend some time shopping around.

However, you should also think long and hard about what you want you plastic to do for you before signing on the dotted line. It’s clear from looking at ‘low interest’ credit cards that plastic isn’t the cheapest way to service debt. Anyone owing substantial amounts of money may be better off taking out a loan (whereby you can take advantage of APRs as low as 6-7%).

This guest post was written by John Smithson, contributor to www.badcreditmobiles.com a resource on getting a mobile phone contract with bad credit history.

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Category: Credit Cards

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