Top 5 ways to get Credit Cards with low interest rates

Before beginning the process of gathering credit cards with low interest rates it may behoove you to really understand why it is you need the credit in the first place.  Not to say that there aren’t many extremely valid reasons for taking on new debt but a simple question to ask yourself is not only why do I need the money but what is my time horizon for being able to pay it off. This will give you a better idea of the total financial commitment you are setting up for.

Low interest rate cards go to those who have excellent credit.

Low interest rate credit cards with excellent credit

There are 5 major factors that play in to helping with a better credit score.  The first thing you should do is to order your credit report and make sure that they are at least correct.  With 3 independant credit bureaus there is a lot of room for error.  If you see something that doesn’t look right on your credit report and you can prove the need for a correction then contact the credit bureau directly and open a case.  They will look in to it and if valid will make the correction on your credit report.

Paying your bills

A big part of the equation of a credit score is whether or not you are paying your bills on time.  If you were a potential creditor you may want to check if the person you are considering loaning money to has a habit of sticking to the original payment contract or somone who just likes the money but forgets to pay it back.

Don’t carry too much debt

The lending party wants to feel confident that you don’t have too much debt so that taking any new debt on could jeopardize your ability to maintain your debt load.  This is often called your debt to income ratio.  It literally looks at how much money you make vs. your debt payments.  If you already have a lot of debt it will show up in your credit score as a negative.

Don’t close out your old accounts

Amazingly there is this kind of catch 22 to credit scores regarding the length of time you have had any reported credit. Imagine, you make decent money have always paid for cash, never going in debt and then wanting to finance a house.  Belive it or not it will probably be very difficult for you to obtain a loan because your credit score will reflect poorly to have no established credit.  How do you get credit when first starting out?  A secured credit card from a bank or a small car loan may be good ways to get your credit history started so that others will lend to you.

Don’t fill out too many credit applications at the same time

If you’ve been out there filling out every credit application to come within 3 feet of you to try to nab those low interest credit cards you may be shooting yourself in the foot.  You want to be deliberate when applying for credit.  When looking for credit cards try to not apply for more than two in a short period of time.  If you try for a bunch at one time that shows a possible desperation which could be a clue to the ability of the borrower to repay.

Have different types of debt

Having a good balance of types of cards and how much is on each card is important.  If possible try to stick to around using only up to 30% of your available balances on each of your current credit cards.  A variable that kind of puts a monkey wrench in this equation is that the credit cards can lower your balance which effectively makes you have less spending ability and therefore an unfortunately higher available credit vs. used credit ratio.

Once you have these 5 ways mastered your credit score should be good enough to go out there and get credit cards with low interest rates.  Best of luck!