Finding credit cards with low interest rates is an effective, and a surprisingly overlooked, way for consumers to reduce their debt and save money. The good news is that this does not have to be an arduous or time consuming process. With a small amount of preparation, a few key pieces of information, and a little persistence, anyone can learn how to be a confident and effective shopper for low interest cards.
Approximately 55% of all credit cardholders carry a balance on their cards, and for these individuals in particular it's important to not only know how to find low interest cards, but to understand the general credit approval criteria used by card companies.
Often, the difference between a low interest credit card and higher interest rate cards can be 10% or more. A card with a balance of $5000 and an interest rate of 10%, for example, would have a minimum monthly payment of $92 (keeping in mind that minimum payment calculations can vary among companies). However, if this same card had a rate of 20%, the minimum payment shoots up to $129. Even worse, the timeframe to pay off the higher interest card (paying the minimum payment) increases by nearly two years, and the total interest costs over the life of the card is roughly $4000 greater. Ensuring you are not overpaying on your credit card interest simply makes good financial sense that can directly impact your bottom line.
Preparing For the Search
Before setting out on your credit card hunt, it makes sense to first do a little prep work to aide in your research. Two points are essential. Firstly - be clear on how good (or bad) your credit is. Secondly - you need to understand the various types of fees and penalties associated with credit cards so that you can accurately compare total costs and features between different card offers.
Know what is on your credit report. With today's laws that govern consumer's availability to their personal credit reports, there is no excuse for not obtaining and reviewing reports periodically. Learn the process to request your credit report.Your credit rating determines if, and how much, leverage you have over the credit card companies. Do you have an excellent credit profile that card companies drool over? Or, conversely, do you have poor credit – and find it difficult to get approved for most types of credit? When we talk about one's credit rating we refer not only to the all important credit score, but also the detailed payment history information contained in your personal credit report. Like any loan product, getting the best rates on credit cards will require an excellent credit history and payment record. The better the card interest rate – the more stringent will be the credit requirements. Being clear on your credit rating let's you know if you should concentrate your search efforts on the very best rates, or perhaps focus on a card offer that is a tier or two down from the lowest rates.
It's important to know and thoroughly understand the cost and fees associated with a typical credit card. Regulation Z of the Truth in Lending Act requires lenders to disclose fees and rates in a uniform manner. Credit card interest cost is expressed in the annual percentage rate (APR). Reg Z is extremely helpful in that it ensures that card companies publish the APR in big, easily recognizable lettering. However, beware that other penalties, fees, or rules may be found only in the fine print. For that reason – make sure to always read and understand the terms of any offer before submitting an application. Other fees to consider are; annual fee, late payment charges, grace period before late payment is charged, over-the-limit fees, credit limit increase fee, cash advance fee, interest rate on cash advances, and any other penalties. Hone in on the fees or penalties that are especially important to you. Do you sometimes need a few extra days to make a payment? If so – the grace period and late charge fees should carry extra weight in your card search criteria.
Also critical is to know when and under what circumstances a company can increase the rate. Credit cards come with either a fixed or variable interest rate. Though cards with fixed rates can go up, companies must provide at least a 15 day notice. Variable-rate cards, on the other hand, change automatically and without notice to the cardholder. Most financial experts recommend choosing a fixed-rate card over the variable rate.
Finding Low Interest Credit Cards
Thankfully, we live in an age where the most efficient and speedy method to find, compare and research credit cards is right at our fingertips- the internet. A good first step is to get an idea of the average card rates in the country, which provides you with a reference point to gauge what rates are below average, above average, or somewhere in the middle. Good credit card rate charts can be found at bankrate.com and indexcreditcards(indexcreditcards.com/credit-card-rates-monitor/). It's not uncommon for rate charts from different sites to show a slight variance in rates. Tabulating the average rates among credit cards from across the entire country is a complex process, with a fair degree of differences arising from data interpretation or timing processes. Use the charts as a guide – and try to utilize more than one.
To shop for, and research, a variety of credit card offers, the recognized leader is bankrate.com. There, you'll find an abundance of information to help you find and evaluate rates and other features. You have the ability to search by card type (such as low Interest cards or rewards cards) or credit type (e.g., excellent, good, average, or bad). Additional quality sites include creditcardguide.com, creditcards.com, cardratings.com, and cardtrak.com. MSN (moneycentral.msn.com/banking/services/creditcard.asp) has an excellent credit card analyzer tool where you can easily scan information on many cards, while Interest.com (credit-cards.interest.com/content/compare/) employs a handy comparison tool that enables you to search by state.
As mentioned before, read the details and fine print of each offer that falls into your desired rate target range. Make sure the published APR is just an introductory offer. You may see a 'V' next to the APR – this signifies the rate is variable. Use several sights to compare a wide selection of card products and offers.
What you need to qualify
Credit card lenders each have their own separate set of approval guidelines, which is dependent on their risk appetite and other economic and business factors. Generally speaking, to get the cards with the lowest rates, a credit score of 720 to 750, or even higher for some offers, will be required. Lenders will want to see a clean credit payment history, a higher than average income, and a low debt utilization ratio. Debt utilization, or sometimes called credit utilization, is a financial ratio that measure a person's total credit balances vs. their total credit limits – and is a figure lenders watch closely when extending credit. To visualize how to calculate a debt utilization ratio – let's look at an example of a person whose only debt is 2 credit cards, each with a $5,000 balance. If this person has maxed out both credit cards (i.e., their amount owed equals the credit limit), his or her debt utilization will be 100%. Lenders would frown heavily on this scenario as it may appear that a person may be overextending or mismanaging their debt. A figure of 20% should be the target for any individual looking to obtain a card with a low rate.
Final Thoughts
Not all consumers, of course, have the necessary qualifications to get the absolute cheapest cards – yet this need not be the end goal for everyone. For some individuals, simply improving on the rate you currently have could be a sensible goal. Evaluate your own credit worthiness – and then set realistic goals as to what credit card product you will target. An important point to remember is that you don't want to apply to too many offers at one time. Doing so raises a red flag to lenders that you may be trying to get too much credit in a short period of time – and can temporarily reduce your credit score. The best method is to submit one card application, and wait for a credit decision before applying for another offer if necessary.
Check out the article how to find low interest credit cards on ConsumerFinanceReport.com. Visit the site to view personal loan content such as overnight loans and peer-to-peer lending.
What is the best credit solution?
ok I had 4 credit cards that i stopped paying on back in 2003.
so on my credit report I have the original lendors reported it as charge-off with zero balance, then i have those 4 debts go to a collection agency with again a charge off with zero balance and "sold/transferred" in remarks. so in short i have 4 debts that was sold/transferred 2 to 3 times, and all of those collection agencies show up on my report. Now i finally got fed up and paid those collection agencies a total of $3200. Those collection agencies have reported those debts as "paid".
I already tried the pay to delete method and didnt work, they say that cant do that, i even tried to pay them a little extra to delete.
So my question is now that I've paid the collection agency that last had my debt, can i get the previous collection agency that had my debt from which it was "sold/transferred" from deleted?
If so how would i do so?
I want to buy an house in couple of months, so please guide me.
thank you
Answer
If a person has accumulated a large amount of credit card debt due to multiple credit cards, the need for a proper counseling for credit card debt consolidation can't be understated. Credit card debt consolidation counseling helps a person get vital insights into the facts that can help him get control over the credit card debt.
Credit card debt consolidation counselors are experts with a good knowledge of debt management, budgeting and behavioral patterns of credit card holders. These services are vital for those struggling to manage their credit card debts. Also called credit counseling or debt counseling the credit card debt consolidation counseling brings immediate relief to a credit card holder.
A person seeking credit counseling can get it from two types of organizations. The professional or commercial organizations, and the non-profit organizations. As depicted by its name or categorization, the commercial organizations charge money for their credit counseling sessions and consolidation help on the other hand the non-profit organizations offer free of charge services. Just because the non-profit organizations are free, it doesn't undermine their quality of service. The persons associated with such organizations are thorough experts and have lived the trauma of being under credit card debt themselves and hence bring their vital experience to the credit card holder.
When a person approaches a credit counseling agency, the first thing it will do is to take stock of the situation and get various facts about the credit card debt. The credit counseling agency collects data about the income, expenditure and spending habits. It will guide the credit card holder about budgeting benefits and try to inculcate good financial habits. Read more from: http://www.credit-card-gallery.com/article/353,Credit_card_debt_consolidation_and_credit_counseling_great_tools_to_get_rid_of_credit_card_debt
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