If you have a good credit rating, you may qualify for a low-interest credit card deal. These credit cards offer much lower interest rates than you’d usually find, meaning they could cost much less over time.

An advantage of low-rate credit cards is that the low rate does not usually expire (unlike 0% interest deals). You’ll pay the same rate for as long as you keep the card. This means they can be suitable for longer-term borrowing, and could even provide a low-cost alternative to a personal loan.

Some low-rate credit cards don’t charge balance transfer fees, either. So although you’ll pay interest on balance transfers over time, you’ll avoid the expensive fee that comes with 0% balance transfer deals.

 

Advantages

A low-interest credit card could save you a lot of money compared with a card carrying a higher interest rate if you cannot repay the balance in full each month.

The low rate can make this type of credit card a good alternative to a personal loan – with some credit cards offering interest rates even lower than the most competitive loans. Plus it’s more flexible – you’ll only be required to make a minimum payment each month, usually around 3% of the balance, but you can pay more if you wish.

Finally, most low-rate cards don’t have an introductory period – your rate will stay the same for as long as you keep the card.

Disadvantages

Low-interest credit cards are usually only available to people with a very good credit rating. Most don’t offer any other benefits, either – the low interest rate is often the only real advantage.

Also remember that even though the interest rate is lower than most cards, interest could still add a lot to your total repayment if you don’t pay everything back in good time.