Low interest rate credit cards

Posted by Felix Okoli on Monday May 6, 2013 at 15:19:17:

When it comes to getting a credit card from a bank, one of the most important thing customers look out for is the interest rate. There are many banks in the system and they mostly do offer credit card facilities but the truth is that they don' all offer the same rates. Some of them have a lot of customers and so they tend to increase their rates while others would like to attract more customers and so reduce their rates.

The rates applied to credit cards by bank depends on the interest rate they get from the CBN for funds, the demand for such soft loans by customers as well as availability of such funds. Banks with more money to lend are more likely to offer a lower interest rate than the ones that are highly patronized or have smaller funds to lend. As demand increases, resources tend to be overstretched and rates could be increased.

How do you then compare and choose which bank to get a low interest rate credit card? I think it depends mainly on the package which are normally publicized in their offers. Nigerian banks have websites and flyers where they advertise their credit card terms and this includes their interest rate of such borrowed funds.

If bank A offers credit card facility at an interest rate of 2% after 40 days and bank B offers 3% interest rate after the same 50 days, then you can say that bank A offers a better deal in terms on lower interest rate. However in terms of interest free days, bank B actually offer a better deal of 50 days since you can avoid paying interest on it within those 50 days.

So one way to get a low interest rate credit card is by comparing credit cards offers across many banks, seeing the terms attached to it before making a decision to apply for it.

Another way to minimize paying interest on your credit card is by avoiding it altogether. You can do this by paying back the loan within those interest free days. Most credit cards come with interest free days and so if you repay the funds you borrowed within the interest free days, you would not need to pay interest on them again.