If you’re confused about what a low APR credit card is, then you’re in the right place. Here’s everything you need to know and how to choose one that’s right for you.

What is APR?

APR stands for annual percentage rate and credit card providers must advertise it by law. The APR shows how much you’ll pay in interest on your debt each year – including additional charges such as an annual fee. Because the APR looks at the total cost of borrowing and not simply the interest rate of purchases, it’s a good way of comparing credit cards and seeing which one will be the cheapest to borrow with.

Why is a low APR credit card different from other cards?

Credit cards all have their own unique selling point – such as with a rewards card, a card offering interest free on balance transfers and purchases or a credit building card.

Low APR cards offer low rates of interest for the life of the card, as opposed to those that offer 0% APR, which tend to be introductory offers for a set length of time.

Is a low APR card for me?

That ultimately depends on your debt and how you use your card. If you have a large debt and it’s unlikely that you’ll pay it off any time soon, then a low APR card could be a better long-term option than a short-term interest free period, where the APR shoots up immediately aftrwards.

You can, of course, keep moving your debt from one interest free card to another, but as these usually offer zero interest for an introductory period only, you will always need to be aware of when the interest-free periods run out. In addition, they often come with charges of around 3% for moving across a balance, so this might not help to reduce your debt.

If you’re the sort of person that pays off their credit card bill in full every month, then a rewards card or cashback card may be a better option for you. Or, if you only have a small debt to pay off, then a card with 0% on balance transfers could make more financial sense. Similarly, if you know you’ll be making an expensive purchase in the near future, then a card with 0% on new purchases might be a wiser investment.

There’s no definitive answer as to whether a low APR card is right for you. It’s really down to your spending habits and how you want to manage any existing debt.

Will I get the APR advertised?

Not always. The APR you get will depend on your circumstances and your credit history.

The APR that credit lenders advertise is known as the ‘representative rate’ and it’s an example of what you could get based on certain criteria, such as your credit status. Card providers have to offer the advertised APR to at least 51% of their customers – and they’re usually the ones with tip-top credit histories.

What are the benefits of a low APR card and what other features should I consider?

If you don’t want to keep jumping from one zero interest card to another and you have a large debt on your card, then a low APR card will let you pay it off in manageable chunks without the interest overwhelming you.

Some low APR cards do offer 0% interest for a short period of time, such as three, six or even nine months (subject to conditions), and these might be a good all-round solution, especially if they don’t charge transfers fees either.

Other benefits you might want a credit card to have include online management, which can help you to stay on top of your finances. Some card providers will also let you use your mobile phone to make contactless payments and offer you a contactless card. Also look for features like fraud protection for peace of mind.

If you’re a loyal shopper, then a low APR credit card associated with your favourite store could give you the added bonus of offering you reward points for shopping in store and elsewhere.

If you tend to get cash out with your credit card, then look for one that charges you minimal or no withdrawal fees; or if you use your card while abroad, then one that waives foreign transaction fees would be a good choice.

Of course, as with any credit card, it’s important to stay on top of repayments and to always pay off the minimum each month, at the very least.

How can I find the right low APR card for me?

Simply search with us – we’ve teamed up with Lovemoney Financial Services Ltd to make it easy to compare low APR credit cards by highlighting their key features. So start comparing today and find a card that’s right for you.

Looking for something else?

comparethemarket.com - the easier way to save

Hello from the UK!

We want to make sure you get to the right place, and noticed you appear to be visiting us from Australia.

If you would prefer to visit our Australian site, please just follow the link below.

Go to our Australian site


Or, continue to our UK site