The cost of borrowing has soared; beware if shopping and summer holidays tempt you. Restrict the use of your credit card to emergency only as credit card interest rates have went up by 7% to 8%, ridiculously expensive. In the end, you may find it overbearing.

Annual Percentage Rate (APR) is the interest rate that you pay on your outstanding credit card balance. Credit cards are notorious for unattractive interest rates. They can cause wreak havoc on your budget. It is requisite that you buy a credit card with a lower interest rate.

Factors influencing credit card interest rates

Credit card companies offer a wide range of interest rates depending on the following factors: credit score, payment history, length of debt, the total borrowings and your credit mix. The first and foremost factor affecting the interest rate is credit rating. The higher the credit score, the lower the interest rate will be. However, there is no guarantee that you will get the best deal. You are likely to get higher interest rates despite a fair credit score because other factors may call your creditworthiness into question.

Credit card interest rates are usually expressed as an annual percentage rates. A credit card company divides the interest rate by 365 and calculate the amount of interest on your balance every day. If you clear all your dues within the grace period, you will not pay off interest. When you fill out a credit card application form, the company runs a credit check to decide on the interest rate.

How to get the best credit card deal

·Make extensive research

Do proper research before you apply for a credit card. If you have a card that carries nominal or almost zero balance, you should apply for cards that offer rewards like cash back and premier rewards gold card even though they carry high APRs. If you carry balance, you should apply at the company where you will meet the minimum standards to get a deal with a lower interest rate. The credit card companies make a hard credit check which may pull your score. Make sure that you have not applied for many applications within a short period.

·Ask for lower interest rates

You can ask for a lower interest rate if you have been a premium client. Sometimes companies allow you to avail cheaper deals in fear of losing you. Make a request if you could get the deal at lower interest rate. If they do not consider your request, ask them for a particular reason for why you are not eligible. This will help you not to make those mistakes. More often than not, borrowers fail to get cheaper deals because of bad credit history that you can avoid by paying bills on time. If it is not possible to get a deal at lower interest rate, you should apply for short-term loans from direct lender like A One Loans, British Lenders, Unclebuck and the like. These loans carry lower interest rates than credit card APRs.

·Pay credit card bills on time

If you have already a credit card and planning to apply for another one, do not rush into it. You will not get the deal with lower interest rate if your credit history is not perfect. Contact credit bureaus to have your report. You will get it free of cost. Check that it does not consist of a default that is not in your knowledge. Further, start paying off your dues on time. Settle all your bills within the grace period as it will prevent you from late payment fees. If you are late by 30 days, your credit card company will raise the interest rate to the penalty interest rate. However, you can go back to your original interest rate if you make six on-time consecutive repayments after the penalty interest rates have come into effect.

·Apply for 0% APR credit cards

Perhaps no credit card is better than 0% APR credit card. Many credit card companies allow borrowers to avail credit cards to make any purchase and pay no interest for a specific time. You are supposed to pay off all bills within that period or else you will pay interest on outstanding balance. Each credit card company follows different criteria. Make sure that you are eligible to apply for such cards. Several 0% APR credit cards are out there. Do enough research, look at pros and cons and choose the one that fits your needs.

Getting a credit card with a low interest rate is not impossible as long as your credit rating is excellent. Every credit card company wants you to prove your creditworthiness. If you make all payments on time, your score will not go down. This will build your credit and you will get as best deal as possible.