How to Get Approval for a Low APR Credit Card: Benefit from the Cheapest Credit Card Rates

Charge cards are a form of revolving debt which means that, unlike a loan or mortgage, they lack a defined term. Identifying a great credit card deal can help a family to reduce the amount of disposable income that goes towards servicing this debt. A low APR credit card or zero percent balance transfer is particularly beneficial for a family that doesn’t clear their full balance at month end.

Ways to Get a Low APR Credit Card Deal

Due to rising levels of default, lenders are applying far more restrictive lending criteria before granting approval. The most important factors are the applicant’s credit score, income to debt ratio and their recent application history. It is rarely a good idea to accept the first offer received as it is unlikely to yield the best deal. In terms of pinpointing the cheapest credit card rates, it is important to use a comparison site (such as moneysupermarket.com) to trawl through the hundreds of different offers.

A Good Credit Rating Means a Low Interest Credit Card

Whenever someone applies for a low APR credit card, the lender will perform an automated search. Any missed or late payments will almost certainly lead to rejection. However, the information held by credit reference agencies isn’t always accurate. It is important to get hold of a copy of a free credit report for all three major credit reference agencies and check to see if there is any inaccurate data. Whilst bad credit takes time to recover from, erroneous data can be eliminated within a few months.

Avoid Excessive Low Interest Credit Card Applications

Each time a loan, mortgage or charge card is applied for, it will record a search on that person’s credit report for 12 months. Whilst it is normal to have several searches each year, having too many applications for low APR credit cards within a short timeframe will be viewed negatively by a lender. This is because it implies that the customer is desperate to attain credit because of financial difficulties. Also, those who have a high number of searches are more likely to be the victim of fraudulent activity.

A Low Income to Debt Ratio to Get a Great Credit Card Deal

The lowest interest credit cards will be offered to individuals who have a realistic level of debt relative to their income. Borrowers with a high income to debt ratio (above 36%) are far more likely to default. This is because, should their personal circumstances change, they have less disposable income to cushion themselves from the negative consequences. Even those with a low income to debt ratio should avoid maxing out any of their charge cards as this alone reduces the applicant’s FICO score.