Average credit card interest rates vary from company to company, just like any other variable factor in the financial markets. Just as you would do any other research, it is important to gather as much information as possible. The key here is not to be cheap; it is to save money. This means evaluating the total cost of using your credit card versus the rewards or interest savings you could realize. Once you have a firm grasp of the cost picture, you can move to the more subjective aspects.
Rewards Credit Cards: How to determine if you are getting the best deals? For starters, look at what you stand to gain by making timely payments. Reward credit cards tend to have slightly higher average APR credit cards because of the additional perks offered. Examples of perks include cash back, air miles, and other privileges tied to a merchant account. Most credit cards come with an APR range which will vary depending on your individual credit history, so worked up on low and average rates can help you make timely payments.
Credit Score: Is your FICO score in good range? Every financial company looks at a credit score when determining a credit card interest rate. If your FICO is above 625, you are in the upper half of the scale, and will qualify for some pretty good deals. If your FICO score is below or even near the lower range, you may want to check out all of your options, since many companies will offer better deals to people with lower ratings. The bottom line is that if you are not able to qualify for the average credit cards, then you most likely will have to settle for the higher interest rates.
Other Factors: Aside from your credit score, there are other factors that play a role in determining interest rates. One of these factors is whether you pay off your balances regularly. If you do not, you may not be able to keep up with the payments and therefore be offered a higher credit score. Companies also look at whether you pay your bills in full each month. If you are someone who does not pay their bills on time, then you will definitely have a hard time securing any type of card. Even with the best credit scores, it is still a good idea to pay off all of your debt, in order to maintain a high credit score in the future.
TransUnion: If you are a homeowner with decent credit, then TransUnion is likely your best option. They are one of the largest lenders in the United States, and are very reputable when it comes to offering low effective interest rates to consumers. TransUnion also has access to many other financial institutions, which will give them access to more competition when it comes to offering better deals. If you are currently receiving credit cards from a particular bank, then you will want to check out TransUnion. TransUnion also offers an easy online application process and credit score calculator.
American Express: American Express has been around for many years, and has a very good reputation. With millions of cards issued by American Express, they have the ability to offer great deals to cardholders, which is why they have one of the highest credit card interest rates around. When applying for an AMEX credit card, make sure that you look over all of their perks, as well as their interest rate. You want to find a card with a very low annual fee and rewards that match your spending habits. A lot of cardholders prefer to receive points instead of cash back, but AMEX rewards cards also offer a good amount of cash back if you spend at least a certain amount each month.
Travel Credit Cards: Travel credit cards often come with very low interest rates, which makes them very attractive for cardholders who fly quite a bit. However, they do tend to have high cash-back rates as well, so you’ll want to balance your spending and the reward of receiving these points with how much you will actually be using the credit card for. You should also consider what kind of travel you will be doing with your card. Some travel cards offer cash back on airfare and hotel stays, while others will give you miles for car rentals and airline tickets. Research both types of cards to determine which one will be better for your travel needs.
APR Balance Transfer Agencies: APR balance transfer agencies can be a major help in reducing your interest rates. If you know where to search for these, you may be able to find a great card with extremely low interest rates. However, you should be aware that transferring balances to an interest free offer from an A.C. card will usually reduce your payment and the APR you are charged. You will also want to think about any fees, as well as the minimum monthly payments required for balance transfers. The APR will vary, depending on the card type, so make sure you get as many details as possible when comparing APR on this card type.