Low Interest Credit Cards
Evaluating Low Interest Credit Cards:
If you have been evaluating the low-interest credit cards, you have no doubt noticed that a few of the cards offer much lower interest rates than most of the others. The majority of credit cards from the larger credit card issuers offer a tiered interest rate structure.
The credit card issuers offering the lowest rates will only accept applicants who have excellent credit. Other credit card issuers who offer tiered pricing on their credit cards are willing to accept applicants with a wider range of credit scores. Those with excellent credit scores will be in a position to get the lowest interest rates, while those with only good to fair credit scores will pay the interest rate at the higher end of the spectrum.
Will You Qualify for the Lowest Rate ?
The particular rate you will qualify for can only be determined by going through the application process. The advantage of applying online is that the issuer will normally be able to make a determination immediately. Once the issuer has checked your credit history and determined your eligibility, as well as the rate you will qualify for, you may then choose to accept the credit card or decline.
Since you have already shaved several points off your credit score in allowing the issuer to pull a copy of your credit report, you might as well go ahead and accept the credit card even if the rate may not be what you had hoped for.
By making on-time payments and keeping the balance on your card to below 30% to 40% of your credit limit.. the issuer may agree to lower your interest rate after a year or so. At that time it certainly won’t hurt to call and request a lower rate.
Low Interest Credit Cards and Credit Worthiness:
Companies who offer low-interest credit cards are actually very strict on the credit worthiness of the applicants.
Customers who do not fit into the exceptional credit category will be wiser to apply for the credit cards with a tiered pricing structure. It is true that with the tiered pricing, you will not know for sure which rate you will qualify for until the issuer has had an opportunity to evaluate your credit history. However, with the tiered pricing structure, you are much more likely to be approved for the credit card. Some of the companies offering tiered pricing include; Bank of America, Chase, Citibank, and Discover.
Credit cards which utilize the variable rate pricing may list a range starting at 13.49%. Your particular rate will be based solely on your credit history.
Suppose you are not eligible for the 15.49% rate, even though it may be by only a question of a few points. Your rate will jump to the next level without question.
For this reason.. and in order to put yourself in a better position.. if your credit history is less than exceptional you will be better off applying for the credit cards which offer a wide range, from the lowest rate to the high rate.
This strategy should help you to determine which cards you wish to apply for based on your current credit standing.
As you well know.. it is always best to make an effort to keep your credit score as high as possible. Your credit score not only determines the interest rate you will pay on your credit cards and other purchases.. but many other services also favor those with higher credit scores.
If your credit scores are not as high as they could be, please see our section on tips for improving your credit.
