Save
money on balance transfers and retail purchases with MoneySupermarket's
comparison of the best credit cards with low interest rates for the
life of the card. These cards also come with great benefits including
travel discounts, no balance transfer fees and contactless payment
technology.
With
so many credit cards offering interest free periods on purchases and
balance transfers, you could be forgiven for wondering why anyone would
opt for a low rate credit card at all.
And although some of those
0% offers may seem too good to pass up – some don’t charge interest for
two years – they’re not always the answer for everyone.
For
instance, if you have a large balance to transfer and you are unlikely
to have paid it off before the interest free period ends, you could get
stung as the rate will leap to an annual percentage rate (APR) of around
18%.
And while you could always switch to another 0% credit card,
you may not want to risk being rejected; which would not only leave you
with a large balance and interest rate, but could potentially have a
negative effect on your credit score and make it even more difficult to
get access to credit in the future.
If this is the case then you
may be better off applying for a low rate credit card, which has just
one standard rate that is usually markedly lower than those offered on
standard credit cards.
What types of low rate credit cards are available?
There
are several types of low rate credit card currently on the market, so
it’s essential that you pick the right one to suit your needs.
If
you have a balance to transfer across from your old card, pick a card
that comes with no balance transfer fee; if, on the other hand, you are a
frequent traveller, then it could be worth applying for a card that
offers discounts on travel and insurance.
You’ll also want to make
sure you get the lowest interest rate possible. Representative APRs on
low rate cards can be anything from around 6.9% to as much 16.9%
(variable) which will really hit you in the pocket if you have a large
balance to pay off.
And while some cards offer the low rate for
the lifetime of the card, some will only offer it for a certain period
of time, so be sure to check the terms and conditions fully before
applying.
What are the advantages of using low rate credit cards?
The
main advantage of a low rate credit card is that, as you’d expect, the
annual interest rate is lower than those on standard credit cards and on
0% credit cards, once the interest-free period has ended.
Interest
rates on low rate credit cards generally start at around the 7% mark,
compared to around 18% on standard cards, and there are usually no
annual fees that can also push up the APR.
This low rate usually
lasts for the lifetime of the card, which means so no nasty rate rises.
This makes low rate credit cards an ideal budgeting tool as you can work
out exactly how long it will take you to pay off your debt with a fixed
monthly payment.
And although they don’t come with any special
offers as far as interest-free periods are concerned, it’s worth looking
out for cards come that without a balance transfer fee, or offer
rewards or discounts on other services, such as travel or insurance.
Why use MoneySupermarket to compare low rate cards?
With
a number of low rate credit cards available – and the fact that the low
rate may not always be as low as you’d expect – it makes sense to shop
around for the card that best fits your needs. Comparing the best deals
available can help you make
savings overall.
And
by using the MoneySupermarket’s comparison tools, you can instantly
compare low rate credit cards or even take a look at some of the other
options available such as low rate personal loans or other types of
credit card.
We're free, independent and
compare all UK credit cards as well as offering exclusive deals you can't get anywhere else.
