Over the last decade, a great deal of media attention has focused on the interest rates many people see coming up on their credit cards. Ranging from modest ten-percent sums all the way up to four fifths interest rates, the credit card industry is loaded with interest rates that border on criminal. In some cases, these rates can reach eighty percent – a nasty sum to be stuck repaying indeed.
However, the vast majority of credit cards don’t have interest rates in this region – most have fairly reasonable rates hovering at some point between fifteen and twenty percent. Compared to a formal loan, it’s relatively high, sure, but the availability of credit for many consumers makes up for it. It’s a ballpark figure, and the vast majority of consumers are willing to deal with this level of interest.
For many consumers, however, enough is enough. Stuck with bad credit scores from late payments in the past and even defaults on their line of credit, many consumers are stuck with the worst of the worst when it comes to credit cards. Charge cards with huge fees, credit cards with massive interest, and predatory loan sharks are the norm here, with everyone aiming to bilk more money from you.
It’s a nasty side of the industry, but it’s one that’s balanced out by the large amount of low interest credit cards that many banks are now offering. Partly in response to the controversies that have hit high-interest credit card providers, and partly due to consumer demand, a number of banks have a credit card that’s built to provide stress-free, low interest, reliable spending for consumers.
Dubbed the ‘low interest’ credit card, these cards are available from all of today’s ‘big three’ credit card companies, and through a range of different banks. Available for both US-based and overseas consumers alike, they’re a low-interest alternative to the bevy of expensive, potentially dangerous, and costly credit cards available today. Better yet, they’re available for you to use right now.
In this guide, we’ll look at some of the most popular low interest credit cards on the market today for consumers and businesses alike. We’ll also look at the rewards offered by these cards, the key advantages that they have, and their biggest perks. On the other hand, we’ll also check the fees or extra costs that are often associated with low-interest credit and charge cards as a whole.
When shopping for a low interest credit card, it’s essential that you understand just how interest can work. The idea of adjustable interest rates catches many consumers off guard, trapping them with a card that’s affordable in its early days, yet increasingly expensive over time. When shopping for any type of loan, it’s best to look for fixed rates – in this case APR – which will not change over time.
Most credit cards, particularly low interest cards, will have an adjustable APR, which changes based on your credit history and repayment speed. If you’re up to date with repayments on your card, it’s a low figure, often hovering around ten percent. If your credit score and repayment history falls down below a set level, you may experience a raised interest rate, often as high as twenty percent.
This is true of most low interest credit cards – Citibank’s Platinum Mastercard, the Low Interest Bank Americard, and others. Almost all of these cards offer a low interest rate for their preferred customers, yet hold the ability to increase it over time. In some cases, this can be an issue for the card holder, such as when the interest rate increases for seemingly no reason, increasing costs.
Almost all of these cards offer some form of perks or buyer rewards for card holders. For Citibank card holders, a small cash back based on purchases can occur. Citibank also offers set rate vouchers for card holders and frequent users. Often, these perks are based on how frequently the card is used – the more often you use it for purchases, the more likely you are to receive your rewards.
Other cards, particularly those through American Express’s platform, offer a cash back based on overall spending. For some cards, this cash back refund rate is as high as two percent. This level tends to be reserved for cards with higher spending limits and accounts with overall high levels of spending, as it encourages business users to charge most of their expenses to their credit card.
Alongside variable interest rates, it’s also important to look out for potentially high fees. In order to make up for their lower interest earnings on low interest credit cards, many banks issue a great deal of fees to their card holders. These can include ‘convenience’ fees, hidden fees related to reaching a credit limit, and even fees for activities as small as using a competitors’ ATM or debit machine.
Despite their occasional disadvantages, low interest credit cards are a good way to save money on your overall spending, particularly if you’re likely to repay your credit card purchases after they’ve gained interest. With a wide variety of cards on the market from many different banks, finding the best low interest credit card for you is often a matter of speaking with your favorite local bank.