Credit card interest rates can cause low-cost purchases to end up costing 3 or 4 times the original amount. High interest rates make it hard to pay down balances or even pay the monthly minimum fee. This credit card guides can help you learn how to get a low interest rate credit card.

Determining interest rates can be difficult to decifer. Many rates are flashed on advertisements and promotional credit card offers, but these interest rates are often only for a short period of time, or rise quickly if you do not meet strict guidelines. Getting a card with a low interest rate require reading beyond the promotional hype, looking at the fine print and searching for the real annual percentage rate being offered.

While you may see credit card offers online or in your mailbox, it does not mean that you will qualify for the rates posted. Often, the best rates are reserved for individuals with high credit scores, or high income levels. Be aware that you will need to be vigilant in assuring the rate you are originally offered is the rate you are really given.

While all credit cards come with an assortment of potentially money-draining fees, the main cost of holding one is it's annual percentage rate (APR). Understanding the APR—in its various forms—is the job of any smart credit-rustler.

APR

• The APR, or Annual Percentage rate is the cost of using credit and is a good measurement to compare credit card offers.http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre05.shtm

1. APR indicates the amount of interest you will owe the credit card company in a year, measured as a percentage of your balance.
2. Creditors are to inform the applicant of a the credit card's APR, but it's crucial to read the fine print.http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre05.shtm

Fixed APR vs. Variable APR

• When you review the fine print on credit card offers, you will find that some cards have a "fixed" interest rate, while others feature a "variable rate".

1. A fixed rate may vary over time, but the issuer is required to inform you before it changes.
2. A fixed rate card with a low APR is often the best credit card low interest option./ref?http://finance.yahoo.com/education/banking/article/101790/Shopping_for_a_credit_card__fixed_vs__variable_rates.
3. A variable rate means that the rate is an interest rate controlled by the Federal Reserve, usually the prime rate.http://finance.yahoo.com/education/banking/article/101790/Shopping_for_a_credit_card__fixed_vs__variable_rate
4. If your variable APR is linked to the prime rate, then it will rise every time the prime rate rises, and vice versa.
5. A low variable rate card can be a good deal, if the prime rate remains low.
6. Note that a variable APR won't be the same as the prime rate, but higher. The difference between the prime rate and your APR will be specified in the contract as the "margin."http://www.in.gov/dfi/education/verate.htm

• Your credit score, or FICO score, is a number between 300 and 850, used by financial institutions to gauge the risk of loaning you money.http://www.investopedia.com/terms/f/ficoscore.asp

1. Congress has mandated credit bureaus to provide all taxpayers a free annual credit report, but it does not include your credit score.http://articles.moneycentral.msn.com/Banking/YourCreditRating/DemandYourFICOScoreNow
2. Each of the three major credit bureaus (Equifax, Experian and Trans Union) can record credit differently, which causes variations in your credit score by bureau.
   • While these figures will most likely be similar, it is wise to review all three.
   • The credit bureaus often offer special packages that allow you to review your credit score for free for signing up for a special program, but you must cancel the program before a monthly or yearly fee is applied. Bureaus may also offer package deals that allow you to receive your credit score from all three bureaus at the same time, for a discounted rate.http://www.transunion.com/
3. Assess the strength of your FICO score. While no one 'credit range' is offered that breaks down scores by good, better or best, as it varies by who is reviewing your score. Each credit card provider can have different requirements. In general, scores above 800 is considered perfect credit, while scores between 750 and 800 are excellent. Scores between 720 and 750 are good to excellent credit risks, and scores between 690 and 720 are just good risks. Scores between 620 and 690 are looked upon as fair and below 620 is a poor credit score.http://www.mortgagenewsdaily.com/wiki/credit_score_ranges.asp The higher the score, the better your chances of receiving a low interest rate credit card.

• Luckily, you're no longer at the mercy of mass-mailed credit card offers. In the Internet age, you can comparison shop for a credit card the same way you would for a flatscreen, or digital camera.

1. Go to Bankrate's credit rates comparison page.
2. In the field labeled Select by Credit Type, click the term that characterizes your FICO score: Excellent Credit, Good Credit, Average Credit, or Bad Credit.
3. A new page will open with a list of credit card offers that are applicable to your credit score.
4. Your credit rating may be lowered every time you apply for credit, so make a careful assessment of each offer before hitting the fateful Apply Now button. According to MoneyCenteral, every application may cause your score to decrease by about 5 points.http://articles.moneycentral.msn.com/Banking/YourCreditRating/weston-raise-your-credit-score-to-740.aspx?page=2
5. In each offer listed, focus your attention on the middle column labeled, Regular APR.
6. The first column, Intro APR lists a limited introductory rate, which is less important in the long run, but worth noting as well.
   • 0% introductory rates are very common, but need to be weighed against other factors, such as the length of the introductory period and the regular APR.
7. Also Note the Annual Fee column. If your rating is in the Bad Credit category, there's likely to be a substantial fee.
8. Write down the names and stats of all of the offers that interest you.

• Here's where things get tricky. The Regular APR figure on the Bankrate page is just a benchmark—it may or may not actually reflect the rate you'll get. Here's where it pays to dig a little deeper.

1. If the offer contains a link to Terms and Conditions, click it.
2. If not, click on the image of the card, which should lead you to an application that contains its own link to Terms and Conditions.
3. Scour this information for any mention of APR.
4. Note whether the APR is fixed or variable.
5. Remember, a fixed rate may eventually change, but the issuer is required to inform you before it changes.
6. Note whether the terms and conditions specify that the rate is fixed for life—if so, this may be a good choice.
7. It's likely that the fine print will list several other rates in addition to the figure specified on the Bankrate page as the "Regular APR." Be sure to note all of them.
   • The rate you're offered will reflect the specifics of your credit history—and you won't know which until you apply.
8. A variable rate card with a low APR can be desirable, particularly if the prime rate is trending downward.
   • To find out the current prime rate, as well as its recent history, see MoneyCafe.com's prime rate page.
9. If considering a card with a variable rate, scour the fine print for two specific figures:
   • Margin: Remember: the margin is the difference between the prime rate and your APR. A 3.99% margin means the APR is the prime rate plus 3.99%.
   • Lower limit or Rate Floor: This feature only benefits the creditor. It means that your variable APR cannot go lower than the stated rate. If the "lower limit" is not actually low, you may not see the benefit of a low prime rate reflected in your APR.
10. Beware the Universal Default Clause: A final thing to look for in the fine print is any mention of a "default clause." This mechanism allows the issuer to jack up your rate to nearly 30% if you make a late payment.

• It's time to narrow down your list of offers to one. Do not blitz the field, thinking you're bound to be accepted by one company or another—remember, every time you apply for credit, points are deducted from your FICO score. Compare all the following stats, make a decision and apply.

1. APR: Note the full range specified in "terms and conditions."
2. Fees: Is there an annual fee?
3. Intro APR: Is it 0%? Is the introductory period long enough to offset a higher regular APR?
4. APR type: Is it "fixed" or "variable"?
5. If it's variable, compare the margins and rate floors.

• Good luck! If you're turned down, just apply to another one of the cards on your list.

The content of this page is intended for general informational purposes only and is not a substitute for professional financial advice.