Lloyds launches LOWEST rate credit card – but is it the best one for you?
Customers could pay just around £50 in interest in the first year
LLOYDS bank has SLASHED the rate on its standard credit card to just 5.7 per cent - the cheapest deal on the market.
Its means on a balance of £1,000 you'll be charged around £50 in interest in the first 12 months - as long as you meet the minimum monthly repayments.
What is the Lloyds deal?
It's low-rate credit card comes with an APR of 5.7 per cent - currently the cheapest deal on the market.
There is no annual fee and - helpfully - you won't have to pay anything to transfer existing debt to the card within the first 90 days.
Those without a great credit score may be offered a higher rate of 10.9 per cent or 14.9 per cent.
You can only apply for the card online.
What are the next best deals?
The credit card market is really competitive.
Low-rate deals can really help those who don't want a 0 per cent deal which shifts to a higher rate of interest when the offer comes to an end.
Money expert Rachel Springall, of Moneyfacts, told The Sun Online: "Low rate credit cards are great for everyday spending for consumers thanks to their simplicity and some of these cards offer more than just a low interest rate."
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The AA's Low-Rate card has an APR of 5.8 per cent and comes with 0 per cent on purchases and transfers for the first three months.
Tesco Bank's Low APR Card comes with a rate of 5.9 per cent - AND shoppers can earn 125 clubcard points for every £100 they spend.
Every three months the points are turned into vouchers which you can spend instore, online or on Tesco fuel.
What type of credit card is best for me?
As well as low-rate cards, 0 per cent purchase cards and 0 per cent balance transfer can really help you spread the cost of borrowing.
BUT you must use them sensibly - otherwise you'll end up spending more and more in interest and repayments.
Balance Transfer Cards
Balance transfer cards let you shift an existing debt onto a new card.
The idea is you then pay down the debt without incurring more interest before the 0 per cent period ends.
For those with the best credit ratings deals on the market can be as long as 40 months - meaning you have nearly THREE AND A HALF YEARS to clear the debt entirely.
BUT credit card companies rely on you not clearing your debt during this period - and end up stinging you with interest when it ends.
Purchase cards
These type of cards can help if you've got a big purchase to make - the 0 per cent period will give you the time to pay-off the debt.
The longest deal on the market is around 30 months.
Make sure you clear the balance before the offer period ends.
Credit cards: What you need to be aware of
THERE are fears Brits' love affair with plastic is storing-up problems.
In August Citizens Advice accused card providers of pushing vulnerable customers even further into debt.
And banks have been asked to set aside £10BILLION to cover the costs of people who can't afford to pay their car loans and credit cards.
If you take out a card with an lengthy 0 per cent period make sure you clear as much of the balance as you can before it ends.
If you don't you'll start paying interest as soon as the period ends.
NEVER miss a monthly repayment and try your best to pay-off more than the minium amount.
Think about settng up a direct debit to make sure you pay every month
And remember the headline rate you see advertised is just that.
Not all customers will receive the best rate - and you could likely receive a higher rate depending on your credit rating.
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