Low APR Credit Cards Today
Before the credit crunch, credit card companies offered single digit interest rates, often fixed for life. Unfortunately, many people found out the hard way that a low fixed APR for life can be turned into a high variable rate if the issuing credit card company decided they wanted to change credit card terms. Today, average credit card interest rates hoover in the mid-teens and low APR credit cards carry interest rates of 11.99% or higher.
Low interest rates in the 11.99% range are generally reserved for applicants with excellent credit. Applicants with good credit will likely find average interest rates to be 14-16%, rates that no one would have considered low two years ago. Unfortunately, credit card companies have been raising advertised interest rates all year long in spite of the fact that the Prime Rate, which is the variable element of most variable rate credit cards, remains near all-time lows.
One reason low APR credit cards are not as low as they used to be lay in the fact that credit card companies are adjusting their pricing ahead of the new credit card laws slated to take effect in February. Under these new laws, credit card companies will have little room to increase interest rates on consumers who fail to pay on time. As a direct result of this, consumers with good credit are footing the bill for our less responsible neighbors.
In the near term, it is unlikely that credit card rates will decrease. In fact, the low APRs of today will actually look low when the Prime Rate increases. For example, should the prime rate increase by a mere two points, average credit card interest rates will be close to 17%. Fortunately, prime rate increases are not in the immediate future, so that is a concern for tomorrow.
Consumers looking for lower interest rates are left with limited options these days. Yet, 0% APR deals, and 0% balance transfers, are still available. In the past, many people used 0% credit cards to defer paying off debt. Today, 0% credit cards should be used in place of low interest credit cards as a tool to repay credit card debt as quickly as possible.