How You Can Save Money with Low Interest Credit Cards

If you are like most people, you have at least a small amount of credit card debt. Paying that debt off can be challenging, especially when the balance is in a credit card with a high interest rate. However, if you are a good credit user and your debt is considerably less than your total available credit limit, there are credit card companies who want to offer you a low interest card.

0% Introductory APR

Almost all credit card companies who want your business will offer you a 0% introductory rate. Sometimes the 0% is just for balance transfers from your other credit cards, but some companies will offer the temporary 0% interest on transfers as well as new purchases.

Take advantage of these offers to transfer your current credit card balance into a 0% interest and pay that debt down for the next six months or so. However, be careful. Choose a credit card that will offer you a permanent low interest rate after the introductory period ends.

What is “low interest”?

The average credit card interest rate is about 12.99% annual percentage rate (APR). That means that each month your credit card balance is charged a finance fee of just over 1%. Some credit cards have interest rates of 20% or more. It’s not unheard of for some credit card companies to charge 29.99% APR!

Compare those interest rates to your home or car loan, which is probably around 5% to 8% interest annually, which is normal for a consumer loan. Your credit card should offer an interest rate comparable to what you could get for a loan, or at least under 10% APR.

Your Credit Rating

To be eligible for the low interest APR benefit that credit cards offer, you must have an outstanding credit score. That means you have a clean credit history with no late payments, and certainly no charge offs or collections. Those individuals who manage their credit most effectively are considered a “low risk” to credit card companies and are favored as customers. As a reward for your creditworthiness, credit card companies will offer you the lowest interest available just so you will use their card.

Negotiate with your current credit card company

You may not have to add another credit card to your wallet to enjoy the benefits of a low APR. Talk with your current credit card company. If your credit is in order and you have a good rating, and if you have been faithful with your current card company for at least six months, you have the right to ask them to reduce your interest rate. Credit card companies want to keep their customers who pay their bills on time. In order to keep your patronage, they may agree to lower your interest rate.

Your good credit should be rewarded. If you know you have an excellent credit score, check your credit card terms. You can get the lowest interest rates available if you apply to the right companies or simply ask for a lower interest rate.

Write to Grace Carter at grace@creditdonkey.com