Ph.D., CFP®, Associate Professor, Finance, Financial Planning and Insurance, David Nazarian College of Business and Economics, California State University, Northridge
Does the definition of a “low interest” credit card change over time?
Yes. As the interest rates in the economy change, so does the definition of what is a low rate. Credit cards are typically variable rates so they will adjust with the rates in the economy. However, I personally do not recommend using a “low” credit card that can be 8-9% compared to the typical 11-12% to finance purchases. It is still too expensive. The attraction of credit cards is the 0% intro APR or special purchase rate on existing cards.
Does it ever make sense to get a credit card with a low regular APR? (vs. a 0% credit card or paying in full)
It depends on the purpose of getting a card. If the goal is to spread a purchase/debt over long periods without paying interest then no, 0% if the way to go. But if the goal is to get points, rewards, or cashback, the rate does not matter. The assumption is that we are paying it off in full anyways. I have seen situations where people wanted 0% but could not qualify and instead got a 4% for a specific time. If you are paying 12% and can get it down to 4%, it makes sense to do so even if it is not 0%.
Compared to loans, does any credit card really have a low-interest rate?
Yes. No loan out there will give you a 0%. Also, there are specials on existing cards at 4%, for example. I am still to find 4% on unsecured loans typically.
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