Finding the lowest credit card rates these days can be somewhat of a trial. At any one time there are a lot of different deals on the market. New offers come and go every day, and comparing these to find the lowest credit card rates is not easy – even for people with a lot of experience!
For a start, it's not only the interest rate on a card which determines how much it will ultimately cost you. Many cards have low interest rates but also have hidden fees and charges which can ultimately end up costing you a lot more. Finding the right deal can be a tricky business. These are some tips which should help.
Beware of introductory offers.
Many cards come with an introductory offer of 0%. This can be on balance transfers or purchases – there are many different deals around. These are all well and good as long as you clear the balance before the introductory offer comes to an end. Otherwise you can easily be stuck with a high rate balance which could soon cost you much more than you have already saved!
Look for hidden fees.
To find the lowest rate credit card it is important that you do your homework. Just because a card is advertised with a low rate, does not mean that it is the cheapest. It's less common now, but some cards have an annual fee, which can be significant. It also depends a lot on how you plan to use the card. If you intend to travel overseas, or make purchases on foreign websites, beware of cards which charge expensive fees on foreign transactions. There are special travel cards which normally work out much cheaper for this kind of use! If your credit rating is good you should have no trouble getting good credit card rates from one of the most reputable lenders.
Beware of Reward schemes.
Marketing experts have long known that people tend to lose sight of things when you start using the words FREE, Discount or Reward. Many cards come with a Reward scheme of some kind. Most of these are just designed to get you to spend more on your card and ultimately pay interest which costs you far more than the actual reward! Many Reward schemes are pretty confusing and offer so many 1000 points every time you use the card, to hide the fact that the points are actually worth very little!
Never choose, and use, a card just for the Reward scheme! It's highly unlikely that the reward is going to be worth anywhere near as much as the interest you will ultimately pay!
However, some cards do offer Cashback – which can be a good way to get some benefit from using your card and much easier to keep track of than a confusing points scheme! An example of a card which offers a Cashback scheme are MBNA American Express credit cards. This card currently offers 1.5% Cashback on purchases from supermarkets, or fuel, and 0.75% on everything else.
Obviously you need to take the interest rate and other features of any card offering Cashback into account when determining if it will actually save you money!