Why do You Need Credit Cards with Low APR?

Credit Cards with Low APR - The beneficial rate for savings

Credit cards with Low APR mean that the credit cards carry a low annual percentage rate.

APR or annual percentage rate is the percentage that stands for the real annual cost of funds over the period of a loan.

This percentage includes additional cost or fees in relation with the transaction.

The lower the APR, the better it is for the credit cardholder, but not for the credit card company.

Most of the time, credit card companies offer credit cards with low APR or zero APR to lure new customers to apply for credit cards with them or to attract customers to transfer their balances.

However, as prescribed by law, low APR offers are only good for about six months to fifteen months; after which the rate goes back to the normal rate.

This is where the customers should be wary about.

They have to make sure that the normal interest is not very high that can cost them a lot and go bankrupt.

Are Credit Cards with Low APR Enough?

Credit Cards with Low APR - Use them to build credit scoreIf you cannot pay each month your card bill, you need to look for credit cards with low APR.

Why so? Low credit card rates are beneficial because instead of paying very high interest rates on your unpaid balances, paying on lower rates will give you more savings.

Imagine what a one percent difference can do to your payments.

Numerous cards are offered by different credit card companies and it is crucial that you do your research to find out which cards have low rates.

But, does having a low rate enough?

Actually, in order to maximize the value of having low rates, there are still some factors that you should take into consideration.

First, is the low APR a fix rate or just a special offer that would last for about six months?

Second, is the annual fee waived or not? If the annual fee is not waived, how much will it cost?

A high annual fee will still be a burden to your finances.

Lastly, how much is the additional cost or fees that are related with the credit card transaction.

How to Get Credit Cards with Low APR

Credit Cards with Low APR - Rates relative to your scoreCredit cards with low APR offered by different credit companies not necessarily have the same rates.

Some rates are lower and some are higher.

Credit card companies will do everything to keep you as their clients and that you use their credit cards.

These companies take record and evaluate how often you use your credit card, how you make payments, and if you go beyond your credit limit.

Each bank or credit card company has its own system and their scores are not the same as your scores with the credit bureaus.

The higher your score with the bank is, the more valuable you become to the bank and will have more chances of getting low rates.

How to get a good score?

Here are some ways how you can get a good score from credit card companies:

  • Do Not Go Over the LimitNever go over your credit limit as it will give the impression that you do not know how to manage your purchases and your finances.Plan your purchases so that you will not exceed your limit.
  • Always Pay On TimeMake sure that you never miss a payment.Paying the entire bill each month is also favorable in getting a good score.Late payments are more costly since you will pay extra charges and penalties.
  • Use Your Card RegularlyUsing your card is good business for the credit card company.It makes you an asset to them.Use your credit card in purchasing your basic necessities in order to use it regularly.
  • Maintain Other Accounts With the Bank in Good StandingIf you have other accounts with the bank, make sure that you keep them in good standing.This will help you maintain a good performance record with the bank.
  • Keep a Long-Term Relation with the BankBeing a long-term customer of the bank is beneficial for you.As a valued customer, you are most likely to receive favors from the bank.

Having a good score can give you leverage with your bank or credit card company.

If the bank finds you to be a good customer, your request for credit cards with low APR has better chances of being approved.

On the other hand, having a bad score may cause the bank to raise your APR.