To understand Low interest credit cards, it is imperative to know what exactly is a credit card and how are the interest rates calculated.
Credit cards imply what they literally mean; to put it more simply they are cards which provide credit to the user or consumer. Now the practical entailment is that a credit card user is given the financial freedom or a line of credit from where he can borrow money to purchase goods or entail services, without having the immediate financial qualification or affordability.
But all this comes at a price, which is defined as the credit card interest rate.
Interest is charged on the amount borrowed by the user and is continued to be charged until the user pays off the amount in full.
Example: Suppose the user has availed of a credit of say $500. But he repays an amount of $499 before the billing cycle ends. Though the remaining amount is a measly $1, yet the user will be charged interest on $500, starting from the day of purchase to the day he repays the balance of $1.
The method of calculation is as follows: APR /100 X ADB/ 365 X NUMBER OF DAYS REVOLVED, where APR is annual percentage rate and ADB is the average daily balance.
Now it is easier to understand what a Low interest credit card is. Credit card companies offering low APR values are the Low interest credit cards.
Low interest credit cards are the best option for business entrepreneurs, who are looking for huge amounts of credit for a pretty long time. There are various banks offering 0% interest for 12-15 months after getting the credit card activated.
Consumer credit cards offer as low as 9- 13 % which is quite lower than the usual credit cards in the market. These are suitable for people who cannot manage to pay off their credits completely every month.
For people who can afford to pay back all their credits every month, there are low interest rate credit cards, but the criteria here is to have a great credit score.
This brings in the next question, how to improve the credit score? There are many methods to improve the credit score, and few of them are listed here. First try to get all the entries corrected, next checking for identity theft or fraud and if matters are totally out of hand, it better to consult a loan specialist.