Credit Cards with Lowest Rates Detailed
What Makes The Lowest Rate Credit Card
The lowest rate credit card is made up of more than just a single interest rate. Most consumers believe applying for a credit card with a low purchase APR means they have the best card possible. This is a common misconception as many factors must be considered before one says they actually have a low rate credit card. Low rates also depend heavily upon how a consumer plans to use their card on a regular basis.
Lowest Rate Credit Card Terms
Credit cards typically have three different rates. Each rate is completely independent of the other. Consumers must look at each rate to determine whether a card is truly the lowest rate possible. Rates include:
- Regular purchases
- Balance transfers
- Cash advances
The first rate consumers look at is the regular purchase APR. This is often the moderate rate, though it may be extremely low during a promotional period. Purchases are the most common type of transaction. In order to appeal to consumers, creditors offer a moderately low rate on purchases. Often, this rate increases or varies based upon the terms of the agreement.
The lowest rate typically offered is found with balance transfers. In order to entice consumers with existing cards, an extremely low balance transfer APR is offered, sometimes as low as 0% for the first year. This allows you to transfer existing balances to save on interest.
The last type of transaction also has the highest interest rates. A cash advance lets you borrow against your credit card. Instead of making a purchase, you receive cash. The rates for cash advances are often higher than 15%. If you make regular cash advances, you could also be subject to additional fees.
A true credit card low rate offers lower rates on all three types of transactions. No matter what your primary use, you never know when you may need to use the card for something else.
How Rewards Factor In
When you consider a low rate card, interest should not be the only thing you look at. Rewards can also be part of the package. If you use a card regularly, a slightly higher rate may balance out if the rewards are good enough. Rewards can be redeemed for cash back, retail products, gas, travel and certain services. For instance, some cards offer as much as 5% cash back on certain types of purchases.
If you make regular large purchases which are paid off within a few months, an interest rate of 10% is actually better than no rewards and a card with an 8% interest rate. Always figure in rewards, if applicable, when seeing which company offers the lower credit card interest rate.
Getting The Lowest Rate Credit Card
In addition to interest and rewards, you must also factor in fees. A low rate card which requires you to pay an annual fee does not save you as much as you think. Some companies offer the lowest rate credit card possible, but charge a fee for everything you do.
Common fees include: Cash advance, Annual Activation, Monthly maintenance
Late payments and Over limit fees. All these fees can quickly add up to hundreds every year. A slightly higher interest rate often saves you more than a low rate card with numerous feeds. Always consider every fee, reward and desired usage when deciding if a card is truly the lowest rate.
Interest is not everything. Read all details in your card terms to ensure the card is actually working for you and not against you. The lowest rate credit card gives you the best scenario for your needs.
Comprehensive information about how to apply online for credit card deals and extensive information about how are credit card rates calculated, written by a team of financially savvy editors and writers, with great deals on credit cards from multiple vendors.
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