Low introductory rate credit cards
By Curtis Arnold updated on May 26, 2012

If you are planning a major purchase in the next few months and want an easy way to spread the payments out, you may want to consider applying for a zero APR or low introductory rate credit card.  Financing new purchases with a low intro rate credit card can result in big savings.  The introductory period on these credit cards typically ranges from 6 months to 18 months or more.  You'll need an excellent to good credit score to qualify for most low introductory rate offers.

What are low introductory rate credit cards?

Credit card companies know that savvy consumers are looking for the best rates on credit cards, so sometimes they offer a low interest rate for a limited time period to attract new cardholders. After the initial period, the interest rate will usually rise to a standard interest rate. Often, there are different interest rates charged for balance transfers versus new purchases, so make sure you truly understand the interest rate structure, fees and minimum finance charge to decide whether one of these credit cards works for you.

How do you qualify for a low APR credit card? Credit card companies assign you an interest rate according to the perceived risk that you will default, or fall behind on repaying your credit card debt. If you have poor credit or a history of problems with credit card debt, you may not qualify for a low intro rate credit card. Find out your credit score before you apply and see if you need to improve your credit before you can qualify for zero APR credit cards. Most cards that come with zero or low intro APR require excellent credit.

What should I look for in a low introductory rate credit card offer?

Before you can choose the best credit card for your needs, you must identify your goals. If you have credit card debt to pay with a balance transfer, you should compare the following features:

1. Initial interest rate
2. Length of introductory term
3. Interest rate after the introductory term ends
4. Balance transfer fee
5. Annual fee, and whether it is waived the first year

The best low rate credit cards have the longest introductory period with the lowest interest rate and the lowest (or no) annual fee. After checking these elements, be sure to check the minimum finance charge so you can estimate your monthly payments. There are plenty of credit card offers on this page to choose among.

How can I compare the best low rate cards for a balance transfer?

You can use a credit card payoff calculator to estimate the size of your payments and how long it will take you to reduce your balance to zero at various interest rates and payment plans. While it may seem to make sense to jump at a zero percent interest rate, you may be better off with a slightly higher interest rate for a longer period if you won't be able to pay your balance in full before the introductory period ends.

For instance, if you want to pay off a $1,500 credit card bill and find a card with zero percent interest for six months, you would need to make a payment of $250 per month to pay it off in time. If you are charged a balance transfer fee of 5 percent, that adds another $75 to the balance. You may want to look into a card with a low interest rate of 3 percent or 4 percent for 12 months to give yourself more time to completely pay off your credit card debt.

Are there any drawbacks to a low introductory rate credit card?

There are two main pitfalls with a low introductory rate credit card. The first comes along with the word "introductory". This means that the low interest rate that is enticing you to apply for the card is temporary. Make sure you read the fine print and know when the interest rate will rise and how much it will go up before you sign on for a new card. That's why it is so important to compare credit card offers.

The second pitfall is that these cards are generally only available for consumers with good or excellent credit. Before you apply, check out your credit report and see if you need to improve your credit first.