Do no interest credit cards exist?

credit cards with no interestNo interest credit cards don’t really exist, and in truth, they probably never did. When a credit card advertises no interest, what they’re really saying is deferred interest. If you don’t pay off your balance before the end of the no interest period, you will end up paying all the interest you saved during that period.

Now that you know that zero percent interest is not real, find credit cards with the best real interest rates at the credit card chaser!

It’s not that zero percent interest for three months or six months is a bad deal; it’s actually a great deal—if you can pay it off in time. Many consumers have come to the end of that promotional credit card apr period and nearly paid off their card only to be stunned by a huge interest charge.

Why don’t we see many bank credit cards advertising no interest these days?

The Credit Card Act of 2009, which took effect in February of 2010, changed the way credit card companies could advertise their promotional rates. The act forbids the use of the term “0 percent APR” because it is misleading. The act also requires that an introductory rate be in effect for at least 6 months before the regular rate kicks in.

The Credit Card Act puts several other protections in place for the consumer as well, such as a minimum requirement for notification of rate changes and clearer disclosure of credit terms. The Federal Reserve has all the details about the legislation on their website.

Are there store credit cards with no interest?

Store credit cards still use no interest periods pretty frequently because they can afford to allow a longer no interest promotional period. Even if they allow someone a year or two with no interest, meaning that the consumer is more likely to pay it off on time and not have to pay interest at all, the store will still at least have the money for the sale of the item itself. For store credit cards, it’s all about making it convenient for a customer to shop in their store.

What is the lowest real interest rate you can expect to see on a bank credit card?

Right now, the average interest rate on a bank credit card is about 16.75%. There are some lower rates out there for specific cards. For a non-rewards card the average is 14.88 percent and for a business credit card, the rate drops to an average of 14.74.

Strangely enough, secured cards do not offer better rates, perhaps because people who need a secured card often represent a bigger credit risk. The best bet for a low interest rate appears to be the variable interest rate cards. Some of these cards have rates as low as 7.25%, but keep in mind that those rates can rise as high as 22.99%.

Can I get a low interest rate credit card if I have bad credit?

If you have bad credit, your interest rates will tend to be on the high side for a normal bank credit card. You can get that rate down a bit by getting a pre-paid card or a secured card–the rate will still be higher than you would pay for a normal bankcard with good credit, but less than you could expect to pay for a bankcard with bad credit. To check your credit rating, you can go to a credit agency like TransUnion.

Do interest rates vary from state to state?

Credit card interest rates are defined by their relationship to the federal prime lending rate. Since the base rate is federal, there really isn’t much variation from state to state. Many credit card companies do choose to incorporate in the same states, like Delaware for example, because of their more favorable business, banking, and/or tax laws.

How do bank credit card rates compare to other lending rates?

Since a bank credit card is, in essence, an unsecured loan, it is possible to compare it to other loans. We’ve already established that the average bank credit card rate is 16.75%. An unsecured signature loan from a bank is not much better, being between 10% and 18%, depending on your credit rating and relationship with the lender.

If you have collateral, the rates become much more reasonable for loans. For mortgages, the average for a 30-year fixed mortgage are about 4% and for a 15 year fixed it is about 3.75%. For car loans, the average interest rate is between four and seven percent, depending on the length of the loan and whether or not the car is used.

Compare credit cards to find the best rates with our credit card finder above!

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