Low Purchase Rate Credit Cards

How to choose a low purchase rate credit card...

If you are forever forgetting to pay off your balance at the end of the month, and therefore, draining your finances with hefty interest rates for the privilege of doing so, a low purchase rate credit card could save you a lot more money than your current credit card.

Low purchase rate credit cards are less specific than many of the credit cards currently on the market, which tend to gear towards specific consumer matters. Air mile cards for frequent flyers, balance transfer cards for people with outstanding debt, are two examples of specific credit cards aimed at certain customers. Low purchase rate credit cards are the middle of the road card, for people who just want the benefits of credit and at a price that won't cripple.

These cards are good for:

Naturally, the generic nature of low purchase rate credit cards means that there are not too many do's and don'ts to abide by to get the most out of them. However, if you want to avoid the few faux pas' read on!

Most importantly, to get hold of one of these credit cards you will need to have a good credit history. This is because credit card companies realise that you will more than likely be carrying a balance from month to month, a balance that they would eventually like back!

The fact that you can carry a balance from month to month means that these cards are obviously suited for people wanting to have the flexibility to pay back their balance when they want to, not when they are told to.

These cards are unsuitable for:

Anybody with a poor credit history. There are credit cards specifically designed for rebuilding credit scores. See our section on poor credit history credit cards if you need to improve your credit rating.

- Balance transfers
If you plan on shifting a big debt from a higher interest account in order to pay it off slowly you would be better off with a 0% balance transfer credit card.

With a 0% balance transfer credit card and a bit of diligent repayment you could pay back your entire debt without any interest.

- Large one-off purchases
So you've finally succumb to temptation and decided that your wall is irreconcilably barren without a 52" plasma running from ceiling to skirting board.

Rather than paying back the sum in instalments at a low rate, why not pay it back at no rate. With an introductory rate credit card you could pay back the balance at 0% over a period of months.

Look for:

- Low APR
The first and foremost thing to scrutinise before getting your low purchase rate credit card is the APR. The APR will include the rate for purchases and any additional annual fees that may be charged. As you will be using the credit card regularly, it is important to get as low a rate as possible. If you are confident that you have a very good credit rating it may be worth checking to see if companies will offer you a better rate than the quoted rates, or 'typical APR'.

- Introductory offers
As the likelihood is that the APR rates will be very similar amongst many of the cards you have looked at you may need other incentives to win your custom.

Low purchase rate credit cards can offer even lower, sometimes 0%, introductory rates on purchases when you first sign up. If you have some bulk buying to do you could kill two birds with one card.

- Rewards
If you are likely to be using the card regularly it would be an added bonus if you could earn cash back on your transactions.

Watch out for:

- Cash transactions
Try to avoid using your card for cash withdrawals of any kind, be it ATM, cash back, foreign currency purchase or a flutter down your local bookmakers.

Credit card companies can make a lot of money by scamming you into using your card for cash transactions. Most will charge a higher rate of interest and some will impose a handling fee, but even if the interest doesn't seem that high and there is no fee, it is still a lot smarter - not to mention cheaper - to use a debit card.

- Annual fees
Generally speaking these cards don't have annual fees, however, some still do. To spot the culprits look out for higher APR's and make sure to check the small print before signing up. An annual fee is an unnecessary burden that will eat into your savings.

Don't forget:

- To forget to apply if you have a bad credit history
If you have a bad credit rating you will more than likely be turned down for a low purchase rate credit card, so don't apply.

Every rejection you receive only chips more points off your credit score, which is exasperating to find out after years of credit rebuilding.

See our section on poor credit history credit cards to find a credit card designed especially for helping you to rebuild your credit score.

Compare low purchase rate credit cards