How to Find the Best Credit Card Rates

Audrey M. Jones
Credit Cards

Because an interest rate is the price tag for borrowing money, the best credit card rate is usually the lowest one available. Before choosing a credit card, make sure that you choose the one with the best rate available to you by comparing it to other rates and investigating the credit card contract's specifics.

Finding the Best Credit Card Rates

When applying for credit, investigate the annual percentage rate (APR) even before you begin to fill out an application. By law, lenders must provide individuals with the interest rate and fee schedule before they apply.

Your credit score plays a role in what interest rate you will be offered and will pay. However, even though your credit score is the same, every credit card company treats it differently. Therefore, compare the multiple company's rates. You can check current credit card interest rates on:

  • Bankrate.com: This website allows users to search for a card with a 0% initial interest rate or a low interest rate. It also provides recent average credit card rates.
  • CreditCards.com: Users on this website can search for a card with a low interest rate or one with a low initial rate. The website also offers a "card match" service that pairs users with credit cards, as based on the user's credit profile.

In addition to conducting a general search via one of these two websites, you might search specific credit companies to investigate the specific rates they offer. For example, Capital One, Bank of America, and Discover's websites contain a complete listing of their offered credit cards.

Comparing Apples to Apples

Make sure that when it comes to comparison time, you compare apples to apples. There are many factors regarding interest rates that affect the actual rate you will pay. Specifically:

  • Initial APR: This is the initial percentage rate that you will pay after opening the card. The "initial period" may last for months or as long as a year and half, and is usually defined in the card's contractual agreement. Beware, however, because many times, these rates are very low to attract new customers and skyrocket after the end of the initial period.
  • APR: This is the rate that you will pay on a monthly basis. It is usually calculated by adding together the market's prime rate and the rate established by the lender for your credit rating. The market rate is based on the rate established by the Federal Reserve. This rate can be two types: variable and non-variable. A variable rate changes with the market, while, in theory, a non-variable does not. However, most lenders reserve the right to change rates even on non-variable cards. In this circumstance, the lender is required to provide you with notice prior to the change.
  • Balance transfer APR: This rate is charged on any balances from other credit cards that you transfer to the new credit card. If you are not transferring balances, you do not need to worry about this rate. If you are, however, watch out because, like initial APR rates, this rate can increase quite suddenly after a waiting period.
  • Cash advance rate: Most lenders charge a higher interest rate for taking cash out against your available credit. Note, however, that this rate is usually much higher than the initial and regular APR.

When comparing interest rates for different cards, ensure that you are comparing the same rate for both cards. This way, you'll know exactly how each card fares when squared equally against the others.

Card Reward, Limits, and Fees

Some credit card companies offer perks, such as miles or points, in the hopes that these rewards will make potential new customers overlook the card's interest rates. Consider each card's rewards and the limits placed on those rewards to determine exactly how "rewarding" they are. For example:

  • How easy is it to earn rewards?
  • How easy it to redeem rewards?
  • Are you limited in the number of rewards you can earn and redeem in a month or year?

Additionally, some credit cards charge annual fees. Sometimes these cards offer low APRs as a means to entice customers. Once again, the lender's goal is to attract customers to the card with a low interest rate, but to make up losses on the interest rate by charging a high annual fee.

Finally, some cards set low credit limits on their card with low interest rates as a way to avoid losing money on those low rates. This means that you may not be able to use the card as often or as much as you like, because you have exhausted your limit. Therefore, always check the minimum and maximum credit amounts when comparing cards.

Cards Regularly Carrying Low Rates

Although the exact interest rate you pay typically depends on your credit rating, some cards offer lower rates on a more regular basis than others. Most cards offer rates ranging from around 11.99% - 21.99%. The cards below have available rates that are lower than this minimum.

  • Iberiabank Visa Platinum Card: This card offers a rate of 9.25%. It also offers a 1.99% interest rate on balance transfers for the first six months.
  • Iberiabank Visa Classic Card: This card carries rates of 7.25% and 10.25%. This card also has a six-month 1.99% interest rate balance transfer.
  • Discover Card: This card's lowest-offered interest rate is 10.99%. It also has a 0% interest rate for balance transfers until the end of 2013.
  • Capital One Premium Prestige Credit Card: Designed for people with excellent credit, this card has 0% APRs on new purchases and balance transfers until January 2015. After the end of this period, APRs for new purchases and balance transfers can range from 10.9% to 18.9%. It has no annual fee.

The Best Credit Card for You

Look at all features and offers the credit card provides. Introductory offers are a good option, but only last for a limited amount of time. Learn what the APR will be after the introductory period is over before opening the credit line, and remember to check for annual fees.

How to Find the Best Credit Card Rates