It is somewhat debatable as to whether you can get the best credit card rates online. The short answer is that you can get the best credit card rates online most of the time. The exception would be for people with excellent credit who may sometimes be approached directly by a credit card company, through mail or email, to offer them a special deal that is not available to the general public.
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Assuming you don’t qualify for a special deal from a credit card company, searching online is absolutely the best way to find the best credit card rates. You can search individual credit card websites or let a comparison website do your homework for you and show you a collection of available cards. In either case, all the information you need, including rates, fees and terms, will be right there at your fingertips to help you make an informed decision.
Some Facts About Credit Card Rates
A credit card rate is the amount of interest one pays to borrow money on a credit card. Credit card rates are usually expressed in terms of Annual Percentage Rate (APR), even though it is usually charged monthly. For example, a credit card with a 12% APR would actually charge 1% per month.
There are a number of factors that determine what rate a credit card will have. The biggest factor affecting the rate is your credit rating. The better your credit, the lower your rate will be. Other major bank rates, such as the Prime Lending Rate, can affect the credit card rates available, as well.
The type of card has a big impact on credit card rates, too. For example, secured cards may offer low or zero percent rates and regular credit cards would offer higher rates.
In general, the fewer benefits a card has, the lower the rate will be. For instance, if a card offers loyalty rewards or no annual fee, it might charge a higher rate than a card with no rewards and a high annual fee.
According to an article in USA Today, another factor that may affect credit card interest rates is securitization. Credit card companies have engaged in the process of selling debt to investors, and that debt becomes a more attractive, higher yield investment if it has higher rates.
Introductory Rates are Even Lower than Regular Rates
Some credit cards offer introductory rates, which are low or even zero percent interest rates that are only in effect for a relatively short time. The Federal Reserve has regulations requiring that the introductory or promotional rate be in place for at least six months. After the introductory rate expires, the rate on the credit card will revert to the normal rate for that card, which is usually considerably higher.
Introductory rates are very beneficial for singular big purchases, but one must be careful not to charge more than they can pay off before the rate expires. The biggest trap that people fall into with credit cards with introductory rates is to charge up big bills, enjoy the period of low or no interest, and then be caught with a huge balance when the rate goes up. Sometimes these people will also try to transfer the big balance to a card with another introductory rate to buy time, and this can work once or twice if you are able to eventually pay the debt off, but in the end, this will usually catch up with you.
Credit Card Benefits Other Than Low Rates
Besides a low rate or low introductory rate, there are a number of things a credit card can offer to try to lure a new customer. No annual fees, low annual fees, low fees for cash advances and similar monetary perks are not too rare for credit cards to offer.
Credit cards also try to entice new users by offering high credit limits.
Bonus points or miles and cash back are probably two of the best benefits offered by credit cards. With these perks, people earn money or points each time they use their credit card, usually amounting to the value of about 2 to 5% of their purchase. In the case of points or miles, these can be exchanged for airline tickets, merchandise, or discounts, depending on the particular program.
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