The simple truth is that those who carry a balance should remain focused on finding a credit card with the lowest interest rate possible. While this may seem like a simple task, it can actually be a challenge. Credit card issuers offer a wide variety of products with interest rates and features that are all over the map. Sorting through these offers can take time, but there is enough money to be saved in using a low interest rate credit card that it will always be worth your effort.
First, give up the idea of earning rewards for your spending. Credit cards that offer rewards will invariably have higher interest rates than those that don't. And besides, an incentive to spend more money is the last thing needed by those who are carrying debt.
Next, go straight to the Schumer Box, that is the table that includes the credit card's terms and conditions. In fact, every card issuer is required to provide this information to applicants. Look for the Annual Percentage Rate (APR) on purchases, which is usually on the top of the page.
In some cases, a single percentage rate will be listed, while most of the time you will see multiple rates or a range of rates. In the later case, cardholders are informed that they will receive a rate based on their individual credit worthiness at the time of the application. And while there is no way to know for sure which rate you will receive, you can at least compare one range of rates to another in order to find the product most likely to give you the best rate.
Other rates worth considering are the balance transfer, cash advance, and penalty APRs. Even if you do not expect to be paying these types of balances, you should at least understand what the rates are just in case.
Finally, finding the best rate is important, but is not the only consideration. Be sure to look at the benefits the card provides and the fees charged such as annual fees, foreign transaction fees and balance transfer fees. You can research and compare low interest credit cards on Credit.com to find one that meets your needs.
Image: Thomas Northcut
