Low Interest Credit Cards

Low interest credit cards are usually reserved for consumers with the best credit scores. Credit card issuers advertise low interest credit cards more than any other kind of credit cards. After all, who does not want the best interest rate possible?

Low interest credit cards should not be the only ones on your list when you are hunting for a credit card. For some people, interest rate or the APR is probably the most important thing to look for when selecting a credit card. However, that doesn’t hold true for everyone. Low interest credit cards are good and should surely be on your list, but APR is not the only thing to look for.

Let’s start with understanding what an APR (annual percentage rate) is and where its importance lies. APR is simply the interest rate that is used to calculate interest on the balance in your credit account with the credit card issuer.

There is no interest charge if you make the full payment of your credit card bill (by the due date). However, in case of a partial payment, you will need to pay an interest on whatever you owe the credit card issuer. You should know that different issuers calculate APR’s differently though most use the Average Daily Balance method.

That means people who are not sure about being able to pay the full amount, every month, should surely look for low interest credit cards. A low interest credit card helps by reducing your total expense by reducing the interest you pay on your balance. So, low interest credit cards help in slowing down the rate at which your credit card debt builds up.

Besides this group, there are others who don’t really need low interest credit cards. These people are capable of (and intend to) pay off their credit card bill in full every month. Their purpose in using a credit card is convenience and other benefits associated with the credit cards. So, be it low interest credit cards or high interest ones; it really doesn’t matter for them.

This group of consumers is more interested in credit card rewards such as cash back, airline miles, points and other goodies. Discover Card was first to offer such rewards but every major credit card issuer now has reward cards in their portfolio.

Low interest credit cards fulfill a need for persons with very good credit who plan to carry a balance. Always remember, the best credit card is the one that meets your needs. Your individual credit situation is probably not the same as anyone else. Don’t rely on what your friends say is the best credit card; the card they promote certainly might be the best one for them. But is it the best one for you.