With credit card use at an all-time high and so many things now requiring credit cards, it’s important to look for low-interest, or low-APR, credit cards. Low-APR credit cards have several benefits, including lower finance charges, less time to pay and smaller and more affordable monthly payments. Learn what it takes to be approved for a low-interest credit card and how to find the best offer.
Getting Approved for a Low-Interest Credit Card
Although you’ll still see tons of credit card offers out there, low-interest credit cards are going to be a little more rigid with their requirements. Here are some steps to make it easier to be approved.
- Check your credit: It’s always best to know what your credit scores are before applying. If there are mistakes, clear them up before rather than after you apply.
- Don’t over-apply: Each time you apply for credit, it can lower your credit score. Don’t apply until you’ve found the right card.
- Lower your debt-to-income ratio: If you have previous credit card debt, pay them off so your debt-to-income ratio will be lower. The best time to apply is after you’ve paid off your other credit cards. Try to have a debt-to-income ratio of no more than 30%.
Comparing Offers
With so many credit card offers out there, it’s important to not latch onto the first offer you see. Don’t be afraid to compare each offer to see which one is truly offering the best deals. One low-interest credit card may offer only an “introductory” low interest while another may offer a consistently low APR.
Some also offer cash back and rebates on purchases. If you use your credit card a lot, these can be beneficial. However, generally those that offer cash back and rebates will charge a higher interest rate after the introductory period. There are also the low-interest credit cards that allow you to transfer balances from other credit cards that may charge high interest rates. These are helpful if you’re trying to lower your payments or consolidate your credit card debts.
Is it Just an Introductory Rate?
Don’t be fooled by all credit cards offering low interest rates. Some of these cards may offer you a low interest rate but fail to tell you that it’s only an introductory rate and after a few months you pay a much higher interest rate. If this is the case, you’re not benefitting much. Make sure you read the fine print and look for the one that’s truly a low-interest credit card.
When a Low-Interest Card is the Best
If it's not a true low-interest card, you may find a better deal elsewhere. You may also find better rewards with a higher interest card! If you pay your balances off every month, you may benefit more from a cash back or rewards card. Low-interest credit cards are ideal for consumers who need to carry balances from month to month.
