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Best credit cards for low interest rates

Lloyds Bank launches new low-APR card as Labour proposes cap on rates

Best credit cards for low interest rates

Lloyds Bank has launched a new, table-topping low-rate credit card with an APR of just 5.7%.

The bank’s Platinum Low Rate Credit Card currently tops the Which? Money Compare low-rate credit card tables. Visit the Which? Money Compare tables and learn more about the card.

The launch comes after shadow chancellor John McDonnell called for a cap on credit card interest to help protect consumers trapped in a debt spiral.

McDonnell suggested a Labour government would implement a cap preventing credit card users from paying back more in fees and interest than the original amount they borrowed. A similar cap already exists for payday loans.

However, if managed responsibly, it’s not necessary for credit card users to pay interest at all. Here, Which? Money experts explain how to choose the most cost-effective card for your needs.

Which? Money Compare table: low-rate credit cards – hundreds of cards compared

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Take advantage of 0% interest deals

0% purchases credit cards

There are hundreds of credit cards which offer people an initial 0% interest deal on all purchases.

The longest deal in the Which? Money Compare 0% purchases credit card table currently stands at 32 months, meaning it’s possible to spread the cost of a large purchase over more than two years.

The key is ensure you pay off your balance before the 0% deal ends. We suggest dividing the amount you owe by the number of months on the deal – and setting up an automatic payment for that amount.

Which? Money Compare table: 0% purchases credit cards – our tables are updated daily

0% balance-transfer credit cards

If you’re already paying interest on outstanding credit card debt, a 0% interest balance-transfer credit card can provide a financial respite.

These cards offer an initial 0% period on all balances transferred from other cards, and the longest deal in the Which? Money Compare tables currently stands at 40 months.

Many of these cards will charge a one-off fee, expressed as a percentage of the balance being transferred. This fee might be as high as 3% of the balance transferred. Many cards with shorter 0% periods offer lower fees (or no fee at all), so it’s worth shopping around for the most suitable deal.

Which? Money Compare table: 0% balance-transfer credit cards – find a great deal 

Low-rate credit cards

If you’d rather choose a card with a low interest rate for everyday spending, browse the Which? Money Compare low-rate credit card tables. With these, it’s likely you’d need to pull off your balance in full every month to avoid being charged interest.

If you’re struggling to be approved for credit, consider the cards featured in the Which? Money Compare credit cards for bad credit tables. These cards have a high APR, but paying off your balance in full will help build your credit score, meaning you’ll be more likely to be approved for a card with a lower rate in the future.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of a provider before committing to any financial products.

Categories: Credit cards & loans, Money

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