APR, which is the acronym for annual percentage rate, is the formula that is used by credit card issuers to determine the amount of interest charged to customers. Although there are dozens of credit cards with low and 0% introductory interest rates, the variable or set APR is the main factor that you should consider. According to Time Magazine, the IberiaBank Visa Select, the Capital One Platinum Prestige, and the Simmons First Visa Platinum credit cards currently have the lowest APR.
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Market Watch states that the average interest rate for credit cards with the lowest APR is 10.73%. This means that virtually any line of credit cards with an interest rate that is lower than 10% is a great find.
How do low introductory interest rate credit cards compare to the best APR cards?
Having your application accepted for a low introductory interest credit card can spell bad news if you have a high amount of existing credit card debt. Many times, these types of credit cards will allow consumers to transfer their higher interest balances over at the same low rate. With a single credit card balance that will not increase significantly, you may find it easier to reduce your debts.
Comparatively, low introductory interest rate credit cards can be burdensome for consumers that max out the lines of credit or simply are not able to pay the minimum amounts due after the introductory period ends. If you are going to apply for a low interest rate credit card, make sure that you have formulated a detailed plan. No matter how appealing the low interest introductory rate may be, realize that it will eventually be over.
Can consumers with poor credit qualify for low APR credit cards?
In most cases, the consumers that pay the lowest APR are those that have higher credit scores. Of course, it is still possible for you to find a credit card with a reasonably low interest rate even if you don’t have good credit. However, this will be difficult if you are just establishing credit for the first time or have had recent financial difficulties.
Applying for every credit card with a low interest rate until you are approved may not be the best strategy, especially if your credit is not good. Aligning yourself with a smaller bank, a credit union, or a financial institute that is affiliated with your employer may help you in having your application accepted.
Although secured credit cards traditionally have high APRs and numerous fees, some do come with low interest rates. If you don’t want to risk having too many inquiries from credit card companies on your credit report, applying for a low interest secured credit card may benefit you.
How do you choose a credit card with the best APR?
Finding a credit card with a low interest rate is important, however, there are other points to consider. If your credit card company imposes a yearly maintenance fee or does not offer any rewards, you may not be getting all of the perks being offered to other consumers. According to JD Powers, consumers voted American Express as the best credit card company in 2011. Although American Express does not have the best interest rates in the industry, qualified consumers find the rewards to be gratifying.
In addition to the Capital One Platinum Prestige, the Simmons First Visa Platinum and the IberiaBank Visa Select lines of credit cards, there are also some low APR credit cards being offered by lesser-known companies. There may be a low interest card available at your local credit union that is only offered to residents of your state or members of a specific industry. Research your options by asking your personal banker, employer, and peers about any low APR credit cards now available on the market.
Even after you have found a few low APR credit cards that you want to apply for, you will need to see if your applications are approved before moving forward. A denied credit card application is not the end of the world, but you will need to come up with an alternative plan if you are not qualified for a credit card with the best APR. Settling for a credit card with a higher interest rate might actually help you to get the credit card you were originally after.
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