A simples guide

Low interest rate credit cards

Sometimes only a credit card will do. Used well, they’re a great way of spreading your spending. But there are all sorts of enticing credit card offers out there, so it can be hard deciding which one is the best for you, especially when they’re all wrapped up in small print. So, to help make things a bit clearer, here’s a guide to low rate credit cards where we’ll look at what they are and then you can decide whether it’s the right one for you.


What is a low rate credit card?

The clue’s in the name – they’re credit cards which have a low rate of interest. Sometimes you might be stuck between choosing a 0% interest credit card and a one with a low interest rate. If that’s you, think about what you really need the card for in the first place.

Most 0% interest credit cards will only have 0% for a certain period of time. If you have a large debt and you know it’s unlikely that you’ll pay it off within that 0% period, then a card with a low interest rate might be the better option. You could of course switch your balance to another 0% card when an offer runs out but let’s be frank – sometimes it’s a faff and it’s another job you just don’t have time to do. Plus, if you apply to switch cards and end up getting rejected, it’ll show up on your credit report and could work against you in the future. 

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I’m confused – what’s the difference between an APR and all the other fees?

This is the tricky bit and all that jargon can get a bit bamboozling, so here goes. Credit cards come with all sorts of fees and interest rates. The APR bit stands for annual percentage rate – this is what you’ll pay on top of the money you’ve spent on your purchases. The APR takes into account any other additional charges that you’ll have to pay such as annual fees.

As the APR takes into account all the extra fees, it’s a good way of measuring how good a deal really is. However – if you think you’ll be using your credit card to take money out of a cash machine then you’ll need to look specifically at any cash withdrawal fees and rates. This is because the interest rate charged for taking out money on your credit card might be different from the overall APR. But if you only want to use your credit card to pay for new shoes and holidays then looking at the APR will be the best barometer of a good deal.

credit cards

Will I get the APR advertised?

That depends on your credit history. The APR that’s shown will be a ‘representative APR’ or basically an example of what you could get based on certain criteria such as your credit score, how much you want to borrow and for how long. Not everyone will get the APR that’s shown and you won’t know what your personal APR will be until you’ve applied for the card.

So what are the benefits of having a low credit card interest rate?

As you’d expect, the main attraction of a low interest rate credit card is… well, the low interest rate. Some low rate cards have APRs of under 7% compared to a standard credit card which could have an APR of 18%.

It’s also worth looking out for extra bells and whistles when you try to decide what card will work for you. Keep an eye open for extras such as no balance transfer fees which means you can move the balance from an existing card to the new one at no cost to you. You might also consider a card with no annual fees (many card issuers will charge you for the privilege of having one of their credit cards). Other cards may tempt you with no cash withdrawal fees or by not charging you to use your card abroad.

Plus, if you regularly shop in once place, you might consider a card associated with that store. You might find some issuers give you extra rewards like vouchers or points if you shop in their stores using their cards.

So there are plenty of options out there, it’s just finding a card to suit your needs. But we can help you with that bit so you can stop trawling around and start comparing deals right here at comparethemarket.com, so we’re pretty sure we can find the right low interest rate credit card for you. Just always remember to pay your bill in full, every month – simples. 

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