Low-Interest Rate Credit Cards – What counts?
The low-interest rate has many amazing benefits. If you are going for mortgages or even want a car loan, you will aim at interest lower than 5%. However, if you are using a credit card, getting an interest rate lower than 10% is rare. In this article, we have listed a few of the benefits that comes with a low interest rate.
– Its charges an APR (annual percentage rate) more than 3 percent points lower than the national average for all cards.
– It offers a starting variable APR more than 3 percent points below the national average.
To benefit from such a low rate, you need to have an excellent credit score.Also,you will sign up as member of credit union, build your credit score and maintain a good credit habit.
Interestingly, there are a number of tools in the tool chest- low-interest cards. Some of them are – the 0% intro annual percentage rate offers and paying in full each month. Doing so, you will minimize your interest charges, build your credit and enjoy your credit card.
Evidently, some cardholders in the US are not aware of the APR they have. As shown in a recent poll by creditcards.com, it was discovered that 48% of cardholders aren’t so sure about the interest rates on their cards.
- Gen Xers carried a balance on more cards and consumers over 55 were more likely to not carry a balance.
- 24% Carried a balance on at least 3 cards.
- 39% Balance-carrying cardholders who knew the interest rate on all of their cards
- 48% Were unsure or unaware of their cards’ APRs
- 43% Men weren’t sure of the interest rate on all their cards
- 53% of Women weren’t sure of the interest rate on all their card.
The cardholders interest rate is base on the credit score, that means the higher the consumers credit score the lower the interest rate to pay. And is the same both for credit card and installment loans.
Regarding installment loans, when Forbes assess the account of two cardholders with the same refinance of $300,000 with a 30-year fixed mortgage but different credit score of 750 and 620 respectively, Forbes found out that the cardholder with higher credit score of 750 gets a 4.25% rate, and low-interest rate of $1,476 to pay per month while the cardholder with a low credit score of 620 gets a 4.75% and higher interest rate of $1,565 to pay per month. Also, a cardholder with higher credit score can get better APR, within a range.
How you can increase your credit score:
- Early payment: It is your most important part of your FICO credit score.
- Complete the payment: This is very important it makes the chances of getting a better score faster. Do not carry a balance.
- Purchase a credit card: The best way to enhance score is through credit card.
- Take small installment loan: When a cardholder takes out a loan, the score gets reduced.
- Avoid the urge to get a new card: Having a credit card helps to increase your credit score, but that doesn’t mean you should have a number of them.
- Be patient. Part of your score is based on the length of credit history. That’s why it’s important to keep going with your good credit habits. Do not be tempted to take out new cards until your credit score is where you want it to be.