Whether by coincidence or design, virtually half of the credit card users in America maintain a balance forward status from month to month on their accounts. More often than not, the state of the economy certainly dictates the level of flexibility in any budget, and when it comes to making a budget work, any creative thinking is worth the effort. While the economy struggles to find an even keel, or at least a positive and sustained direction, the average consumer is seeking more ways than ever to lessen the interest rate burden on their credit card balances. One sure-fire method to consider is a low interest rate credit card.
Lower Interest Rates or Balance Transfer Options
For the cash-strapped consumer who, out of necessity, needs to carry a monthly balance on their credit card account, there are two viable options to consider. The first is to find a suitable, and affordable, 0% APR balance transfer offer. The second option is to apply for a low interest rate credit card. Generally, and as a matter of wise fiscal policy, considering the option of acquiring credit cards with a 0% APR are very handy, though only if the balance on the account is paid off in full before the promotional offer runs out. If the consumer is caught on the wrong side of the expiration date, and is still carrying a balance, the higher interest rate will kick in, which can be anywhere from 22.9% to 29.99%, depending on the lending institution or credit card issuer. Naturally, some consumers seek relief from this eventuality by attempting to transfer the existing balance to a different 0% APR card. Aside from the additional 3% to 5% transfer fee, the applicant will find approval unlikely, simply because the approval procedure will operate on the premise of the greater the need, the smaller the chances.
To expand on the point, while a low interest credit card may not seem as appealing as one that offers a 0% APR, they do present a tremendous amount of economic wisdom for the consumer seeking to carry a credit card balance over an extended period of time. The term ‘low interest’ may seem a bit up-side down in this age of rising interest rates, and those rates can be showing up anywhere from 12.99% to 14.99% from the major banks. Nevertheless, with a good bit if careful and diligent investigation, the are still quite a few respectable low interest rate credit card offers out there to choose from. Many of the smaller banking institutions, and more than a few credit unions, are offering quite decent low interest credit card deals with interest rates in the 7.99 to 9.99 percentile. Often these attractive offers can be found at the local banking level, where consumers have a better working relationship with their neighborhood lenders.
The Credit Score and Interest Rate
When a consumer is comparison shopping for a low interest rate credit card, there are some key points to consider during the process. In general, most low interest rate credit cards offers require the applicant to have a good to excellent credit rating. If the consumer doesn’t quite fall into this rating category, the next step might be to improve their credit score (Read: Bad Credit Score? Here’s 1 Credit Card That Can Help You Rebuild It).
Another alternative is for the consumer to try applying for a ‘tiered’ form of interest rate, where the interest rate is adjusted according to the applicant’s creditworthiness. In this case, there will undoubtedly be a higher interest rate assessed, though ‘higher’ is far better than ‘too high’.
The Initial Credit Limit
It is also a wise suggestion for the consumer to consider the initial credit limit as well. Begin by inquiring to a few lenders to determine at what amount the initial limit will be set, since many low interest rate credit cards generally offer a small credit line at the outset, and usually as low as $500. If this amount seems unsatisfactory, then check the bottom line with additional sources. It is prudent to find out about any balance transfer offers to go along with the deal just in case. There are lenders who even offer a combination purchase and transfer variable APR rate as low as 7.49% for a specific period of time, which amounts to a low interest rate loan for the duration of the agreement.
All the various lending institutions will have their own specific application requirements, terms, and conditions. Some will stipulate the credit history as being a primary influence affecting approval, while others will focus on the specific credit rating or FICO score. Employment history and proof of income can also be required for approval of a low interest credit card. Take the appropriate time and research necessary to determine the most appropriate offer with the most flexible and convenient terms. A low interest credit card can be a vital tool in maintaining a consumer’s financial well being, and allowing a good opportunity for getting the most mileage, and the most sense, out of every dollar.