Finding low interest rate credit cards

September 23, 2008 · Filed Under Credit Card · Comment 

Many people who apply for the credit cards for the first time often get excited about the rewards and perks offered by the credit card companies. They do not give too much attention towards the interest rate offered on that card. Interest rate is however the most important part if you are carrying a balance. Just to include the finance fee on top of the interest rates, your purchases will end up costing a lot more on an airline credit card, which comes at around 15% to 19%. You can get low interest rate cards at 7% to 10% at the maximum. When you are paying high interests on the airline credit card, getting extra miles redeemable for free flights does not sound right because you will be spending a lot in extra interests. If you are having an airline credit card with a 19% APR, you will be paying a lot of money in interests only and it will take long time to pay off the debts. In some cases, it might exceed the price of the airline ticket

  • How to keep the interest rate on your credit card lower?

You can always prevent your low interest credit card from accruing higher rates. It requires a little planning and managing your cards efficiently. Make sure that you are always making timely and full payments on every billing cycle. If you are revolving the credit on every billing cycle, the credit card company can charge you APR up to 25% to 30% or may be more.

If you have to compare between fixed or variable interest rate on the credit card, choose the fixed rate option because the APR on the fixed interest credit card does not change. The variable rate is tied to the Federal Reserves funds rate. When the funds rate goes up, the APR on the credit card will automatically go up.

Don’t borrow cash from your credit card account. Utilize the low interest credit card for purchases only. If you borrow cash from the low interest credit card, the credit card company will charge you very high interest rates and to make situation worse, your monthly payments will be applied towards the charges with the lowest annual percentage rate.

Sorting out all the credit cards that you have might seem to be a daunting task, but if you compare the savings on each card in your wallet, it will be well worth the effort.

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