How to Get a Low Interest Rate Credit Card

The credit card market is highly competitive and offering a low interest rate credit card is the banks way to attract new customers and increase business. These days consumers have endless choices in credit cards and a variety of credit card companies to choose from. Providing low interest rates gives a company an edge over their competitors.

The credit card market is highly competitive and offering a low interest rate credit card is the banks way to attract new customers and increase business. These days consumers have endless choices in credit cards and a variety of credit card companies to choose from. Providing low interest rates gives a company an edge over their competitors.

One thing that you have to determine is if you qualify for a low interest rate credit card. Your credit history will give you a good indication of how you will stand with a credit card company. If your history is largely positive, then chances are good the low interest rate offers will be piling up in your mail box. Of course even if your credit history is not as stellar, that doesn’t mean you will be barred from a low interest card, but it will be harder to obtain one.

There are two kinds of cards to consider when you are looking for a low interest rate credit card.  First, there is a fixed rate card that works exactly like other fixed rate loans, like a mortgage rate. Basically this means that if the company offers you eleven percent then it will stay at eleven percent for good.

There are a few exceptions to this since the company does have a few discretions to change the rate for various reasons, like missing a payment or finding out that information on your application was inaccurate or has changed. But even if they do change the rate they are obligated to give you the option of canceling the card and keeping the old rate for the remaining balance. 

The second type of card is a variable rate, and this is the kind of rate that is much more common. As you might already know, certain factors in the credit market affect the average interest rate on other forms of credit and if affects credit cards the same way. But it also means that there’s a chance your rate could change a few times a year. Does this mean that variable rates are inherently bad? Of course not.

There will be times that because the prime interest rate is exceptionally low; the variable rate will be lower than most fixed rates. And just as there is a chance that your rate could increase, it could also decrease if that is the market trend.