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Understanding Low Interest and 0% APR Credit Card Offers

When seeking out a credit card that offers a low interest rate or a 0% APR, it is important to closely examine the fine print, especially if you will be using your new credit card for balance transfers. When you apply for a credit card that uses language such as "up to" or "as low as," be sure to double check the credit card that arrives in the mail before using it.

0% Interest Rate for up to 1 Year

Many credit cards offer 0% interest rates for up to 1 year. However, not all applicants may qualify for the longest durations. Generally, the best 0% introductory rates are given to the applicants with the best credit. Other applicants may qualify for the credit card, but only be offered a 0% rate for 9, 6, or even 3 months.

When you view an online application's terms and conditions, it will state the length of time 0% rates will last. If the card you apply for offers multiple 0% terms, exercise caution before transferring balances online. While it may be tempting to expedite the balance transfer process, there is always a risk that the 0% period you think you should qualify for will be shorter than the one you are granted.

If you are seeking out a 0% rate for purchases rather than balance transfers, getting a 0% APR for 9 months instead of 12 isn't as big of a deal. Just be sure to carefully review your card's terms and conditions when they arrive in the mail so you aren't taken by surprise.

Interest Rates as low as X.99%

Just as credit cards offer 0% terms of varying length, they also offer tiered interest rates. With tiered interest rates, you may be approved for a credit card, but offered a rate that is more than the lowest available.

Basically, there are two types of "as low as" interest rate offers. The first is a strict tier. With this type of offer, consumers may be offered a 10.99% rate, a 13.99% rate, or a 19.99% rate based on a review of their credit. Unfortunately, a consumer whose credit profile falls just below what is needed to gain the best rate will get the second best rate, which can be significantly higher.

The other type of "as low as" rates use an APR range. For example, these credit cards might offer interest rates between 10.99% and 19.99%. If an applicant doesn't qualify for a 10.99% APR, they may get an 11.24% APR. These offers may yield better interest rates for most people who lack rock solid credit scores, but still have good credit.

Final Thoughts

Now that you know how to interpret credit card interest rate jargon, seeking out a 0% APR or a low interest rate may feel like more of a challenge than you originally anticipated. However, you're also armed with information that will help you make a better decision when you apply online. Hopefully, this will translate into a search that yields a better credit card deal.