Getting the Best Credit Card Rates
“How Do I Find the Best Credit Card Rates?”
If you’re like most households, you want to stretch your buying dollar, and you’re not above a little legwork to find the best deal.
When you’re looking for the best rate or APR on a credit card you’ll probably start searching online, checking out deal sites and credit card company sites. Before you start wading into the wealth of information online, you’ll want to become familiar with credit card terminology. Here are a few things you need to know about interest rates or APRs.
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The APR (annual percentage rate) is the annual interest rate that the credit card company charges when you make a purchase with your card. Most credit cards offer a variable APR that is based on the Prime Rate. The Prime Rate is determined, in part, by the federal government, and the variable interest rates quoted by the credit card companies will rise when the Prime Rate rises.
Here’s the deal on Introductory APR offers
What’s the deal with these introductory rate offers you see? Card companies often offer their best rates for a short time period as an intro APR offer. For example, you might see a low or 0% introductory rate for 9 or 12 months on purchases and balance transfers.
These introductory rates are offered for a limited time, so a 0% introductory APR credit card offer can help you save money over the short term. After the specific introductory period is over, you’re charged a standard APR, which may vary according to the terms and conditions of your credit card (so it’s important to read and understand all the card’s terms).
When looking for the best rates on credit cards, examine the entire offer and make sure you understand all the terms and conditions.
A credit card with a 0% APR introductory offer plus a low standard APR after the intro offer ends can help you keep your interest charges low and get the best possible value for your money.
Remember that many credit cards charge different APRs for purchases, cash advances, or balance transfers.
How to keep your great APR
Most credit card companies have terms and conditions that allow them to increase the APR if certain conditions are not met. For example, if you are late with a payment, your credit card company could raise the APR on your card and/or charge a penalty or late fee.
To make a great card offer an even better value:
• Make payments on time by the due date each month to keep your low APR offer. Remember, late payments could cost you your great low intro rate! (Plus, paying on time is one way to help keep your credit score high — your payment history can make up as much as 35% of your credit score.)
• Consider a rewards credit card that gives you something back on all your spending. If you put most of your spending on this one card you can concentrate your rewards, rather than having several cards with small amounts of rewards on each card.
• Find out what other benefits and perks the card offers—like special merchant offers or car rental insurance coverage when you use your card.
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The best rates for the best credit ratings
Every issuer is legally required to clearly disclose the APR for each credit card. But, finding the best rates is not as easy as simply choosing the lowest APR. Most banks disclose a range of possible rates—and customers are offered an APR according to their own credit rating. The best rates are given to those with the highest credit scores and solid credit histories, among other criteria.
TIP: Want to know even more about using a credit card wisely? Check out our credit management tools. There’s lots of good stuff there, including a glossary of card terms.