With all the different offers out there, you might be wondering exactly what is a low rate credit card? Simply put, a low rate credit offers cardholders the convenience of a credit card which has a lower rate of interest that the other cards out there in the market. However, sometimes this concept is not really as simple as it appears to be.

Duration of the rates

Many credit cards offer introductory rates these days; on the other hand, some credit cards offer low interest rates for life.

For instance, some credit cards, which are known as balance transfer cards, offer a very low or 0% interest rate for the first few months that you use the card, for any balances that are transferred. These cards are not traditionally considered to be low rate credit cards, since their rate of interest on purchases and cash advances tends to be quite high.

On the other hand, many cards offer a low introductory interest rate, which is then increased after a few months. Is you are wondering, what is a low rate credit card, then the answer is that these cards do not really qualify as being such – low rate credit cards offer low interest rates for the life of the card.

Advantages and disadvantages of low rate credit cards

Low rate credit cards have both their advantages and their disadvantages. Obviously, their major advantage is the fact that you are not charged very high interest rates. However, many low interest rate cards do not offer other facilities that are offered on other regular credit cards. Most low rate credit cards do not offer free purchase protection or travel insurance, nor do most offer a rewards program.

Shopping for a low rate credit card

If you have decided that you would like to obtain a low rate credit card, you can easily do so by doing some clever shopping around. Look carefully at the interest rate details of a credit card before you sign up with one.

Most larger banks do not offer low interest credit cards, since they rely on their exist customer base and brand, and are not too concerned about competing on price – instead, a smaller bank might be a better bet when it comes to low rate cards. Cards that offer generous rewards programmes also do not tend to be low rate cards, since they rely on the interest rates to cover the cost of the rewards programme.

Hopefully, this article has answered your question, what is a low rate credit card?