But not all credit cards have to be just a way to extort high interest on your repayments. So when is a credit card not a credit card? When it’s a low APR credit card!

‘APR’ refers to the Annual Percentage Rate. This is the amount of interest you will have to pay back to your credit company on top of the money you borrowed from them. Rates vary greatly, so you would be well advised to look around for a credit company that offers the lowest APR on any loans you take out.

Also, there is a catch here. Beware of credit card companies which offer you a low APR as a special introductory offer which only lasts a few months after you take out the loan. Credit cards are businesses and they don’t offer you something for nothing. They need to make their money back somehow and unfortunately, often, the payback you have to give for that low APR to begin with is an interest rate later on which is higher than that which most people are paying!

So, when you are looking for a low APR credit card, you need to take a long-term view. You need to think realistically about how much money you need to take out in a loan and how long that will realistically take you to pay back. Then you need to get out your calculator and compare some loan companies. What will you end up paying over the life of a loan?

You may be surprised that you could end up paying more for a loan which initially has a low APR but where the interest then rises sharply after a few months. It may be financially better for you to take out a credit card with a company where you are paying a consistently medium rate APR all the time. That may work out being cheaper for you.

The trouble may be, finding these low APR credit cards these days as fewer companies are willing to lend money and are wary of getting their money back, in the credit crunch. Another danger to avoid is being beguiled by any low APR rates you find and being seduced into borrowing more money than you need to or that you can afford to pay back. However, if you are sensible, low APR credit cards – if you look at the repayments carefully – do offer you a chance to save some money. You just have to do your homework and find the right one for you.