Why credit card interest rates aren’t always important

When shopping for a credit card, you may be put off by the card’s interest rate (also known as APR, or Annual Percentage Rate). However, in some cases, you shouldn’t let the credit card interest rate sway your decision.

What type of customer are you?

If you’re a transactor, you pay your credit card bill in full each month. In this case, the interest rate shouldn’t be a factor in your deciding on a credit card.

If you’re a revolver, you pay do not pay your credit card bill in full each month. In this case, your credit card interest rate may be a factor, but not always.

How do you plan to use the credit card?

In case of emergency

Someone planning to use a high-APR credit card for emergencies only may be unconcerned about the interest rate as they’re hoping that the emergency never arises.

Take advantage of a low introductory interest rate period

For an applicant planning to primarily use the credit card during its introductory interest rate period, the credit card’s high interest rate might not be a concern. When you apply for a credit card, your standard interest rate is assigned. If the credit card has an introductory interest rate period, you will have a lower interest rate, sometimes as low as zero percent, for a limited time. After the introductory interest rate period, your standard credit card interest rate will 

Take advantage of special credit card bonsues

Oftentimes, credit card issues will offer incentives for signing up for credit cards. It’s very common for these credit card bonuses and welcome offers to range from $100-$300 (and that’s on the low side). This may make the high APR worthwhile depending on how often you plan to use the card and carry a balance.

Your credit card interest rate is not permanent

Some credit card issuers allow customers to request a reduced APR. So, while shopping for a credit card, if you feel that the card would be useful, but you’re put off by what might be your standard interest rate, it might be worthwhile to apply for the card.

However, you should first contact the credit card issuer to determine if they allow credit card interest rate reductions. If they do, you should ask 1) what the qualifications are, 2) when you can apply for an APR reduction, and 3) the amount by which they typically reduce interest rates.