Written by Most people would love to have a low rate credit card. For those who carry a regular balance, less interest would be a blessing. However, when you apply for those lower rate cards, more often than not, you are declined.
The question is why? What makes one person a great candidate, but not another? Some people may believe it is luck. The truth is, there are secrets to getting the best credit card rates possible. With a little knowledge and planning, almost anyone can qualify for lower rates.
Maintain A Good Credit Rating
The most important thing you can do is maintain a good credit rating. The better your credit rating is, the lower rate you will qualify for. Those with a bad credit rating are simply too much of a risk. If they do not pay their balance or file for bankruptcy, the company makes nothing. With a good credit rating, the company knows they are more likely to be paid back on time.
A few ways to maintain or improve your credit rating include:
- Pay all bills on time
- Stay well below your credit limit
- Check your credit report for errors regularly
- Be aware of changes to your credit card terms
Any recurring bills, such as loans or credit card payments, affect your credit score. Always pay these on time. You must pay the minimum payment in order to avoid any penalties. This not only establishes credit, but prevents lower scores.
People with the best credit scores only use around 25% to 30% of their available credit at any given time. This is the total available credit you have from all outstanding loans and credit cards. Basically, this tells companies you are good at managing your debt and do not rely solely on credit cards to make purchases.
Credit reports are not perfect. Check your own report regularly, at least every quarter, to ensure there are no errors. Common errors include missed payments that were paid on time, additional credit you do not have and accounts not showing up. Correct these errors to see your score rise.
Some people get in trouble because their terms change. With the exception of variable rates and promotional terms, companies must inform you of any and all changes to your credit terms. If you cannot manage the new terms, cancel the card, pay off the balance and avoid a hit to your credit score.
Talk To Your Credit Card Company
Though it may sound simple, talking to your credit card company may help you get a better rate or at least better terms. Most companies offer a variety of cards. Ask if they have a card more suited to your needs. While you may have qualified for a higher rate before, you may now be eligible for a new lower interest card. If the problem lies with the payment date, this can often be changed as well to help you pay your debt off quicker without late fees. Pay on time and you qualify for better rates.
Best Rate Credit Cards – Rewards Or Interest
Sometimes the best rate comes in the form of rewards. The best rate credit cards often have a mid-range interest rate of around 12% to 14%, but offer excellent rewards, such as cash back. One of the best kept secrets of credit cards is the balance between rewards and interest rate.
Some of the best credit card rewards include cash back on purchases, points for travel and deposits in your savings account. For those who use their cards often, these rewards often add up to better benefits than a low interest rate.
Remember, the best rate can mean low interest, rewards or a combination of both. The best rate credit card depends mainly on each person’s needs.
Understand how to save money using credit cards with detailed information written by a team of editors and writes and get great credit card offers from multiple credit card merchants, with top ten credit cards rewards tips and info on getting deals on credit cards with high limit.