Low Interest Credit Cards

After the economic recession the idea of low interest credit cards may have seemed to have fallen by the wayside, but there are still many of these cards in existence for the savvy consumer that is willing to do some searching.  Low interest credit cards are the best line of credit that one can open since it will allow them to accrue lower interest and pay much less back than any other form of card type credit.  Of course, in order to qualify for a low interest credit card many conditions need to be met.

Most low interest credit cards are only available to those with excellent credit scores as they are considered low risk investments.  The better an individual’s credit score the more the credit agency extending the line of credit will view their responsibility towards debt.  Due to the fact this a candidate with a healthy credit score appears to make payments on time and regularly they can rest assured that their credit debt will also be paid making them great candidates and low risk applicants for a low interest credit card.  In this manner, these cards are available as a reward for responsible spending.

At times, low interest credit cards can also be available to those with only satisfactory or good credit rankings due to equity.  Equity essentially means that a line of credit can be secured with an asset that is valued at the price of the line of credit or higher.  If a line of credit is secured then the lending agent can rest assured they will receive their funds back at some point of time thus making the candidate a low risk applicant and a great choice to receive low interest credit cards.  For this reason those with homes will have a better chance at receiving low interest credit cards.

Unfortunately, secure employment or a high regular income alone is not enough to entice a lending agent into offering low interest credit cards.  This is due to the fact that an income alone is not enough to guarantee repayment and thus while an offer for a line of credit may be extended, the interest rate may not be as low as one would like to see.  The only way to increase the availability of low interest credit cards is to increase a credit score or open a line of equity in some form.

Low interest rates are important when it comes to credit cards since interest rates denote how much you will need to pay back for an advanced purchase in the future.  Anytime a credit card is used the purchaser is required to pay back the amount of their purchase plus any interest that they have accrued on their card in the meantime.  For example, if you purchase an electronic item valued at 100 pounds and it takes a year to pay back the purchase you will owe 110 pounds on it if your interest rate were 10%.