Low Interest Rate Credit Cards
A low interest rate credit card is a good thing to have if you habitually carry high balances on your credit cards from month to month. Ironically, the vast majority of people who qualify for low interest rate credit cards are those with higher than median incomes and who pay their credit card balances in full each month.
Low interest rate credit cards are the ones that are always advertised in the media, be it on the Internet, at credit card websites, in magazines, etc. What these companies don't tell consumers is that only a small percentage of those who apply for a low interest credit card will actually be approved. You might be approved for a credit card if you apply, but it will probably be at a substantially higher interest rate unless you are one of the privileged few who has a high credit rating and high income.
Other ways credit card companies maintain profits with low interest credit cards:
An annual fee. Some credit cards might offer a low interest rate but require you pay an annual fee of $50 or $60. When the expense of the annual fee is factored in, the effective interest rate is higher than the actual rate stated. Apply only for credit cards that have no annual fee, or, insist that the issuer not charge you a fee.
The low introductory rate. Don't let the low introductory rate fool you in to thinking the credit card is a good deal. If the rate jumps from 0% to 15% after six months, it isn't a good deal. Credit card issuers know that low introductory rates are great lures. Many people will spend spend spend during that low introductory rate period. Then suddenly, the introductory period ends, and your monthly minimum payment jumps dramatically and you have a big balance on the credit card. Just ignore the low introductory rate when you're picking a card unless you're planning to transfer a balance from another card so you can pay it off rather quickly (but transferring balances from one credit card to another on a regular basis can damage your credit score and cost you big in the long term).
High balance transfer fees. Some cards that offer low balance transfer rates sting you with a high balance transfer fee -- sometimes as high as 3% of the balance transferred. Also, watch out for a low introductory rate on transferred balances that suddenly increases dramatically --- higher than the average rate for all credit cards. In other words, always read the terms and conditions associated with any credit card very carefully before you apply.
Do You Qualify for a Low Interest Rate Credit Card?
Only those with excellent credit qualify for the best credit cards. This means the very lowest credit score you would probably have to have in order to qualify is 750. This credit score requirement generally applies to every one offering zero or very low interest rates, be they car dealers, furniture stores, or credit card companies.
You can find out if you are likely to qualify before filling out the application by ordering your credit score online.