Single Rate Credit Cards: A Guide

Posted by Nick Niesen on October 29th, 2010

With so many credit card deals on the market, consumers can have a hard time deciding on the right deal for them. There are many rate options for new credit card customers. These include cards with a 0% interest rate for a fixed period, low balance transfer rates or introductory rates. However, there are also cards which feature a low standard interest rate.

Who Should Get A Single Rate Credit Card?

A single rate credit card can be a useful option for those who are looking to transfer large sums of debt which they are hoping to pay off. As well as transferring balances from other credit cards, new credit card customers are often able to transfer balances from high interest store cards. Some may even be able to transfer outstanding loans to a lower rate credit card.

Is There A Catch?

Unlike other cards, a single rate credit card has one rate for all transactions. This means there should be no extra charge for cash withdrawals, credit card cheques and purchases. It's always best to read the fine print to make sure, though.

To get the best from a single rate credit card, try to pay off more than the minimum amount. This will reduce the amount owed as well as the amount to be paid each month.

What About Introductory Rates?

The whole point of a single rate credit card is that it offers one rate for all transactions. Most credit cards with a low standard rate offer that rate only, with no introductory low rate. Those that do offer a low rate for a fixed period often charge for the balance transfer. The charge in this case is usually 2% of the amount transferred. This can soon add up when people are transferring large balances.

What Kind Of Interest Might I Have To Pay?

Credit card interest rates vary widely. Aside from the 0% preferential rates and the cards within the 20%+ bracket, there are several cards with rates between 8.9% and 17.9%. It's best to look at the other advantages a particular card offers before making a final decision.

Do Single Rate Credit Cards Offer Rewards?

Like other credit cards, some single rate credit cards offer reward schemes. Some cards give a cash back reward of a percentage of spending over certain thresholds. For example, consumers who spend under £3,000 a year might get a cash back reward of 0.5% of the amount spent. People who spend over that amount might get a cash back reward of 1% of the amount spent.

Other possible rewards are Nectar points; air miles or other travel incentives; points which can be exchanged for vouchers, travel or cash; and travel insurance.

There are also several credit cards that contribute a fixed proportion of your spending to certain charities. The card issuers may also offer a donation to these charities as an incentive for opening an account with them.