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When Is The Best Time To Use A Low Interest Credit Card?

Aug 17, 2007
The resident financial experts will tell you that there are times when one credit card is better than another. They offer different features, and many are better suited to being used in one situation than in another - or, to be more precise, you'll get more benefit from using one credit card over another in certain situations. One may offer the lowest interest rates, while another offers high cash back values on certain purchases and yet another may reward you with points that can be used to purchase merchandise and services from participating merchants. How do you know when it's best to use one over another?

When to use a low interest credit card
A low interest credit card lets you carry a balance on your account at a low rate of interest. The best time to use a low interest card, then, is when you make a purchase that you expect to pay off over time. The time to whip out your low interest option is to buy that new computer, pay for your holiday or cover an emergency purchase for which you can't pay in cash.

If you expect to pay off the full balance of your purchase in the same payment period, no matter how much it is, then the APR isn't as important. If you can pay the purchase off in the next billing period, you won't be paying interest on it. In that case, leave the low interest credit card in your wallet and pull out one that will offer you other benefits - like cash back.

What is the best credit card to use for daily expenses?
A low interest credit card seldom carries other benefits. The low interest card is considered to be benefit enough. As more and more grocers and convenience stores accept credit cards for your purchases, there are new ways to benefit from using your credit card. You can, for instance, pay for your groceries, shampoo and toiletries and your lunch with plastic, and reap the benefit of cash back or reward points. The trick is, though, that you must pay off your account balance at the end of each month, or you'll be paying interest on the food you ate last week - and that's not a productive use of your money. If you're disciplined enough to pay your accounts on time each month, then the best card to use for daily expenses is the one that offers the highest reward or cash back scheme. It may surprise you how much you'll earn back even at 1% cash back on your groceries for the year.

What about other special use credit cards?
Note that we left 'petrol station' out of the list of places to use your cash back card above. That's because there are a number of credit cards out there that offer special savings schemes specifically for gasoline. You can earn as much as 5% back on every purchase at the pump, making a petrol card the best credit card to use for motoring expenses.

You can compare credit cards and their benefits at online comparison sites, where you'll find all the best credit cards on offer in the UK, research their benefits and apply online for the best credit card for each use you have.
About the Author
Jon Francis has been involved with finance for many years! With an in-depth knowledge of the credit card UK market help helps others get the best from a credit card.
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