When it comes to picking out a credit card, there are number of factors to consider. From annual fees to perks like cash back and airplane miles, every credit card account is different. Perhaps the biggest factor consumers should focus on is the card’s interest rate.
Expressed as an annual percentage rate (APR), this interest rate is the fee paid for the privilege of borrowing money. Essentially, this fee is the price a person pays for the ability to spend money today that would otherwise take time to accumulate. On the flip side, for the banks doing the lending, that fee/interest compensates you for giving up the ability to spend/invest that money today.
This fee varies based on a number of factors, including credit worthiness, amount of debt already outstanding and type of card issued. However, it’s the single most important feature choosing a credit card. Pay too much in interest rate fees and that $4 latte could end up costing you around $12 over time.
According to credit bureau Experian, the national average credit score in the U.S. is around 750 out of a maximum score of 990. That’s not too shabby of a score. For the average American, finding a low interest rate credit card shouldn’t be too hard. Luckily for you, we’ve done some of the leg work.
First up is the Citi Simplicity card from Citibank. The card offers a 0% intro APR on purchases for 18 months as well as a 0% intro APR on balance transfers for 18 months. After that first year and change, the variable APR is a low 12.99% for qualified consumers. The Citi Simplicity card also features no penalty interest rate increases when you miss a payment due date, and zero late fees.
For those who like to travel, the Capital One issued Venture Rewards card could be for you. This card offers 0% intro APR on purchases till August 2013. After that, consumers will be subject to a low variable APR of 11.99-19.99% depending on your credit worthiness. The kicker for the card is the amount of airline miles a consumer can accrue. The Venture card allows users to redeem miles for airline tickets, hotel rooms, car rentals and other travel needs. Additionally, there is no limit on the amount of miles you can earn and those miles don’t feature an expiration date. Currently, the card gives you 10,000 bonus miles once you spend $1,000 in the first three months. Consumers earn 1.25 miles per dollar on every purchase.
For those looking for cash-back rewards, the Discover More card, issued by Discover Financial, is a great choice. The card offers a 0% intro APR on purchases/balance transfers for 15 months and a low variable APR of 10.99% after that. The card provides 5% cash back on quarterly rotating categories. Shopping online through Discover.com will also net you up to 20% in cash-back bonus rewards at popular retailers.