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The Truth About Low-Interest Credit Cards

The Truth About Low-Interest Credit Cards

Low-interest credit cards, a.k.a. APR credit cards, can be great for people that carry a monthly balance forward. Unfortunately, you most likely won’t qualify. The dilemma is most credit card companies will only offer low rate credit cards to those with excellent credit, or at least above average. 

Around 9% is the average rate for low rate credit cards with some even going as low as 3.99% for those with an awesome credit rating. Consider these factors if you’re researching low-interest credit cards.

Credit score

Everyone knows you must have a great credit to qualify for low-interest credit cards. In terms of the credit bureaus, credit scores may fall in the excellent and good credit groups. You’ll most likely qualify in either of these groups.

In the event that your credit score does not fall into these groups, do not worry. You can still improve your score. 

You may negotiate and possibly receive low rate credit cards if you have a less than appealing credit, given that:

  • you have been working for the same company for a certain time. 
  • the credit card provider is confident that your income remains steady.

Common rates of low-interest credit cards

Low-interest credit cards offer great rates, commonly falling between 9% and 15%. These cards are great for large purchases. Although the balance may be high, you won’t be charged as much interest as a normal credit card would charge.

Just because ‘low rate’ sounds enticing, bear in mind that it can be just an introductory special. It may only be for 3 months and, before you know it, it severely goes up 17%. The balance transfers can be expensive as well around 3%.

Even a 0% APR is a possibility, with the same condition as the aforementioned. It’d be a great deal if you’re sure you’ll be able to pay off your balance before the certain period is over. So, before you even apply for low rate credit cards, carefully read all the terms and conditions. Shop around before committing to a card.

Fees of low-interest credit cards

Beware though that most low rate credit cards come with a cumbersome annual fee or membership fee — as high as $100. Those with great credit are not intended for these fees. They are for high risk cardholders with bad credit.

Eventually, this can cost more than a credit card with a higher APR. Discuss these fees with the credit card company and see if they can be waived. 

If you liked our “The Truth About Low-Interest Credit Cards” and took away some valuable information, check our blog space constantly for more tips to get out of debt and updates on the best budgeting apps in Australia.