Lowest Rate Credit Cards
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Lowest rate credit cards are those which offer the lowest interest rate (sometimes called "APR" which means "Annual Percentage Rate") after a typical 0% initial rate. Although the interest rate is obviously of great importance when selecting a card, do be sure to consider other factors including fees, rewards and other terms and conditions.
Also be sure to check to see what the advertised rate applies to. For example with many credit cards, the advertised rate applies to purchases, but different rates might apply to balance transfers or cash advances or other classes of items. Even the
exact way the interest is applied can vary between different classes, such as cash withdrawals being charged interest from the day they are obtained instead of form the billing date as is usual for purchases. So use this information to get a real idea of all the details and how they will apply to you rather than being influenced unduly by just comparing advertised rates.
Rewards are another factor which can make one with a higher rate actually more beneficial than a lower one. Some cards offer rewards such as cash back or air miles. Other cards offer special deals on merchandise from particular merchants, free previews, movies, even payments towards a mortgage. Of course, the details of rewards offers can also vary, such as the percentage which results in cash back which can sometimes be different for different classes of expenditure, such as 1% for general purchases but 2% for gas.
Another significant factor that many people overlook is that the credit history and rating for a particular person might result in them being offered a different rate from another person. So to get the best rate, it can be beneficial to do what one can to improve ones personal credit rating.
Rates on different cards can vary between about 6% up to almost 200% or more. Some very high interest cards offer a grace period where no interest is charged so can still be helpful in smoothing out short-term liquidity problems. Also keep in mind that the APR is not the whole story, as some cards apply interest daily, some monthly, some in more complex ways. Also note that it is common for a company to be legally able to change the rate at any time, or even cancel a loan requiring the full amount to be paid off immediately.
Some users have been shocked recently when the company doubled the rate even though they have been making repayments correctly. One reason for this is changing economic conditions, particularly securitization on loans, although lenders often deny this as a reason for changes.
To summarize, lowest rate credit cards are useful, but that is not the only factor one should take into consideration when choosing between different offers.
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