Finding The Best Low Interest Credit Card

February 20, 2013, Written By Natalie Rutledge

When considering a new credit card, many people are enamored by the attractive rewards that many cards offer. But rewards cards are only profitable if you pay your balance off in full on time each month. If you carry a balance from one month to the next, then it is important to forego the rewards and search for a credit card with a low interest rate. However, finding the best low interest card can be a little tricky. In this article, we will discuss the process to go through to find the best low interest card for your particular situation.

Identify The Purpose Of The Card

Why are you looking for a low interest card in the first place? This should be the first question you ask when you start your card search. Are you looking to make a signficant purchase that you will pay off over the next year? Are you going to be making on-going purchases and carrying a balance for over a year? These are important questions since low interest cards fall into two distinctive categories:

Low Intro Cards: Low intro rate cards are exactly that–they have a low introductory rate, generally 0% for 12-18 months, on your purchases, and then they return to an ongoing interest rate. This is a good option if you are planning on making a few larger purchases and want to take advantage of the short term 0% rate. These cards are attractive if you can pay them off in full before the introductory period ends.

Low Interest Cards: Low interest cards, on the other hand, are cards that may or may not have a low introductory rate, but they will have a relatively low ongoing interest rate. A good rate these days may be anything under 11 percent. It is important to remember that your actual interest rate will depend on your credit profile. This will also affect the credit limit you receive on your new low interest card.

Research The Options

Many consumers may be partial to a certain card issuer–it may be because of where we bank or it could be due to the catchy advertising. However, it is important to remember there are a number of quality issuers on the market offering very similar credit cards.

After you decide the type of card you want, compare the different issuers in a specific category (be that low interest or low intro) to determine whether one issuer has a better offer than the others on the market. You may also want to compare other card features, such as rewards program, annual fee, balance transfer rates and other key metrics.

Consider Your Credit Profile 

You may find a perfect credit card with all the right numbers you’ve been looking for, but it may not be designed for your credit profile.

Credit card issuers specifically design cards for specific credit scores. If you have excellent credit, you’ll be rewarded with the best interest rates and most attractive offers. But if your credit score is less than ideal, expect to pay a little more in interest each month until you’re able to build up your credit profile.

It is important to find and apply for a credit card that is designed for your general credit situation–otherwise you likely won’t get approved and will be back at square one.

Apply For The Card

This may sound simple, but so many people do the research to find the right card but put off applying for it because they are busy or don’t feel like dealing with the application at that time. Remember, interest rates and special offers change often, so that perfect card may not have the same offer or terms a week from now. When you find the low interest card you’ve been looking for, apply for it. Don’t procrastinate.

Use The Card Wisely

Once you’re approved for the card, make sure you use it wisely. If you got a low introductory rate card for one big purchase, don’t make additional purchases on it. Be sure to pay off the amount you determined you would pay each month, so it is completely paid off by the end of the intro period. If you are getting a card with a low ongoing rate, don’t make unnecessary purchases just because the rate is low. Make sure you pay off your balance as soon as possible; ideally, in full each month.

These simple tips will help you find the best low interest credit card for your situation, and use it properly so you don’t dig yourself into debt. The low interest rates can sometimes be used as an excuse for people to not pay the card in full each month. Make sure you don’t fall into that trap.

The information contained within this article was accurate as of February 20, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.

About Natalie Rutledge

Natalie Rutledge majored in Communications at Mississippi State University. She was in sales for a number of businesses and spent nine years working as a communications advisor to various entities. Natalie can be contacted directly at [email protected]
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