How Do Low APR Credit Cards Work?
Low APR credit cards, also called low APR (annual percentage rate), credit cards offer you the opportunity to borrow cash over a very long term while still providing you low, interest-only payments. This low interest rate remains consistent for the life of the card, so you’re safe in the knowledge you’ll always be paying low, interest-only payments for your entire life. The term length of the introductory low APR credit card can range from just a few months to a few years. You can choose to pay extra, use the revolving credit balance for purchases or save it for a rainy day.
The key to finding low APR credit cards is to research and shopping. With the thousands of different offers out there you should always look at several options before deciding which card best suits your needs. Some rewards cards come with zero interest for a certain period of time, or they come with a low-interest rate for an introductory period. Other low APR credit cards have a standard interest rate and higher, fixed rewards rates.
Most people with bad credit are going to want to use a cash back or rewards card to build their credit rating and improve their chances of qualifying for a low APR credit card in the future. The easiest way to obtain both a cash back or rewards card with a low APR is to choose a credit card with a low APR, and to pay extra on the balance due every month. Choose a card with a low balance transfer fee and low ongoing fees and charges. You can even choose zero APR balance transfers if you’ve got bad credit. By paying extra on your credit card balance, you can reduce the amount of interest you need to pay.
To find low-rate credit cards with low APR, first search for offers that offer long-term interest rates. When looking at a low APR offers it’s important to check how much interest will be charged on the balance transfers. Some cards will offer low APR balance transfers that charge an annual fee for balance transfers, whereas others don’t. Compare the low APR credit card with its competing offers and choose the best low APR credit card that offers the lowest interest rate. If you make monthly payments on time, you’ll pay fewer interest costs. You can also save a lot of money by paying off your credit card each month, as many cards offer special low-interest-credit-cards-for-monthly payment.
As you search for low APR credit cards with low credit score, remember to carefully read the terms and conditions. Make sure that any offers that seem too good to be true are not. For example, some cards offer cash rebates but require you to pay an annual fee. Be wary of any credit card offers that offer to lower your interest rates in “unite” or “double” packages. These types of credit card interest rates are typically temporary, and once the term is over, your rates will likely be unchanged. Also avoid signing up for more than one low APR card.
In addition, make sure that your personal financial situation can support low interest card purchases. If you have good credit, you may qualify for low interest card purchases, but if your credit score is poor, you may only qualify for low APRs. It’s important to think about your own personal financial situation and only apply for low APR credit cards with low APRs when you really need them.
Many people think that they are good candidates for low-interest cards, because they are already thousands of dollars in debt. However, if you have a bad credit history, you may not qualify for low-interest credit cards. Keep in mind that many major credit card companies consider debt-to-income ratio, which is a calculation of how much income is needed to service the amount of debt. The higher the debt-to-income ratio, the greater your financial risk. Credit cards with low APRs can be great to use in situations where your income to debt ratio is high, but if you have a bad history of debt and high debt-to-income ratio, you may not be able to make the payments required on your low-interest cards.
Low APR credit cards allow you to make purchases with a low balance by paying just the minimum amount required. However, it’s wise to realize that credit scores do vary, and some companies may deny you a low APR card based on your past credit history. Use a reputable website to gather information on low APRs, fees, and other details before applying.