Credit Cards You Rarely See


Updated on 17 February 2009 | 0 Comments

Here are a couple of types of credit card that are often overlooked.

This article was originally sent to Fools as part of our 'Summer Lolly' email campaign.

Here are a couple of types of credit card that are often overlooked.

Low APR Credit Cards

Several credit cards are marketed as `low APR' when they certainly aren't. How can 16% per year (APR) be considered low? Low, in my opinion, is 10% or less, unless you're struggling to get alternative credit and reduce your interest rates, in which case 12% might be low to you. And, really, low APR credit cards are best for those of us who can't get a 0% or other special deal that's appropriate for our goals.

If you reduce your interest rate from 16% to 10% then you will pay about 40% less interest per year if your card balance stays the same, and probably even less if you put extra money into reducing your balance!

Watch out with low APR cards because with most of them the rates can be changed at any time. Always read letters you receive from your card provider, and don't underestimate the impact of an extra couple of percentage points of APR!

For cards with 10% APR or less, there are just four providers that I can find. (It's relatively hard to get reliably complete data on low APR cards, but I think I've got them all. Please let our readers know by writing a comment or discussion-board post if you are aware of any other such cards that are still available to new customers.)

The Top Four Low APR Credit Cards

Card name

Typical APR* for purchases and balance transfers

Notes

Barclaycard Simplicity

6.8%

 

Capital One Low Rate

8.5%

You also get 0.5% cashback on purchases.

Intelligent Finance Flat Rate Credit Card

8.9%

 

Co-Operative Bank Fixed Rate Platinum

9.9%

You can fix the rate at 9.9% for 5 years.

Data from Moneyfacts (which powers many of The Fool's search tools) and through my own meanderings round providers' websites. I checked the facts, ma'am, on 19th August.

*'Typical' means that two-thirds of applicants who are offered a card get the advertised rate. The other third get a worse one.

Lifetime Balance-Transfer Credit Cards

Lifetime balance-transfer cards have a fixed interest rate on balance transfers until you've paid off the balance, whether it takes you two years or twenty. (Please don't take twenty.)

I can find five that offer good rates of interest, although they're from just three providers. Here they are:

The Top Five Lifetime Balance-Transfer Cards

Card
name

Balance
transfer
special
rate

Balance
transfer
fee

Typical
APR
on

purchases

Notes

Citi Platinum
iTunes
Rewards

4.9%

3%

17.9%

You get 1
point per
£1 spent.
Check how
much a point
is worth
before you
get excited.
You get 2,000
points if you
spend £250 in
the 1st 3 months,
but please don't
spend just to
get points.

Citi Platinum
Life of Balance

5.8%

2.5%

16.9%

 

Citi/Advantage Gold

5.8%

3%

17.4%

 

Leeds BS Card

5.9%

2%

17.9%

 

Barclaycard Platinum Credit Card with Long Term Balance Transfer

6.5%

Nil

16.9%

 

Looking beyond the special-deal rate to include the fee (column three), the best two cards are Citi Platinum iTunes Rewards and the Barclaycard Platinum Card. If you're going to take quite some years to pay off your balance, Citi wins. If not then it's Barclaycard.

Don't make purchases on these cards, even if there's a 0% deal. If you want both balance transfers and purchases, consider one of these credit cards. Look for cards with deals of equal lengths.

Compare credit cards via Fool.co.uk

Comments


Be the first to comment

Do you want to comment on this article? You need to be signed in for this feature

Copyright © lovemoney.com All rights reserved.

 

loveMONEY.com Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FCA) with Firm Reference Number (FRN): 479153.

loveMONEY.com is a company registered in England & Wales (Company Number: 7406028) with its registered address at First Floor Ridgeland House, 15 Carfax, Horsham, West Sussex, RH12 1DY, United Kingdom. loveMONEY.com Limited operates under the trading name of loveMONEY.com Financial Services Limited. We operate as a credit broker for consumer credit and do not lend directly. Our company maintains relationships with various affiliates and lenders, which we may promote within our editorial content in emails and on featured partner pages through affiliate links. Please note, that we may receive commission payments from some of the product and service providers featured on our website. In line with Consumer Duty regulations, we assess our partners to ensure they offer fair value, are transparent, and cater to the needs of all customers, including vulnerable groups. We continuously review our practices to ensure compliance with these standards. While we make every effort to ensure the accuracy and currency of our editorial content, users should independently verify information with their chosen product or service provider. This can be done by reviewing the product landing page information and the terms and conditions associated with the product. If you are uncertain whether a product is suitable, we strongly recommend seeking advice from a regulated independent financial advisor before applying for the products.