At a Glance
When it comes to choosing the right credit card, there are many factors to consider. Credit cards with low APR and cash back are two of the most popular options. But which one will work best for your finances, cash back or low interest? Here’s what you need to know.
What is a cash back credit card?
A cash-back credit card is a type of credit card that rewards its users with small refunds (“cash back”) on their purchases in the form of statement credits. The amount of cash back that you receive is based on the percentage of your purchase price that’s refunded to you. For example, a card that offers 5% cash back on all purchases would give you $5 back for every $100 spent.
What is a low-interest credit card?
A low-interest credit card is an excellent option if you want to save money on your monthly payments. This type of credit card offers lower interest rates than other types of cards, which can help you save money over the course of a year. To qualify for a low-interest credit card, you usually need to have excellent credit history and a track record of responsible borrowing habits.
Low-interest credit cards are especially helpful for consolidating debt, as the lower interest rate can help you pay off your debt faster.
Comparing low APR vs. cash-back credit cards: Which is best?
There are a few things to consider when deciding whether cashback or low APR cards would work best for your situation.
One factor to consider is the interest rate. Low APR credit cards offer lower interest rates than cash-back cards but often come with higher fees and limits on how much you can earn in rewards.
Another factor to consider is the rewards program. Cash-back cards generally offer higher rewards rates than low APR cards, but these rewards can be less valuable if you don’t use them often.
Finally, consider your spending habits. If you’re looking to boost your finances and reduce your monthly expenses, a low-interest credit card may be the perfect solution for you. However, if you’re generally careful with your money and aren’t interested in earning rewards, a cash-back card may be better.
What is the difference between low APR and rewards?
Low APR cards offer a lower interest rate on your balance than other cards, but you may not be rewarded for your spending. Rewards cards give you points or cash back for every dollar you spend, which can help you save money over time.
Which type of card is best for your finances depends on a few factors, including how much debt you currently have and how much money you want to save.
Both options can help reduce your overall costs over time, but be sure to weigh all the pros and cons before deciding.
How to choose between low APR and cash back?
If you’re trying to decide between cash back vs. low APR credit cards, it’s important to consider the rewards potential of both.
Cash back cards tend to offer higher rewards rates than low APR cards, but these rewards can be less valuable if you don’t use them often. Low-interest credit cards are excellent for debt consolidation or if you need time to pay off large purchases but may not offer the same level of rewards as some other types of cards.