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How To Make Your Credit Card Work For You

Oct 7, 2007
Everybody seems to be just itching to get hold of a low interest credit card. Who would not be? These cards definitely offer a lot of major advantages over normal credit cards. Aside from the low interest, other fees like annual fees might also be waived.

Low interest credit card means you will not be paying more for a credit card purchase. Since there are several offers available in the market, it would be better to first understand how these interest rates work.

Some credit card companies might entice you to sign up for their credit card by offering a low introductory interest rate. This could even be as low as 0%. This rate could go on to up to a year. When this introductory period is over though, you would have to pay the normal interest rate, which in most cases is referred to the purchase APR.

Customers might find these offers very much appealing. True enough, these low interest offers could definitely help lower your credit card debts. With these cards, consumers can just transfer balances to whoever has the lowest interest rates. Fortunately for consumers, banks are in stiff competitions with each other. Low or even 0% interest offers can last to up to a year, in a bank's effort to keep the customer's financial portfolio.

Not everyone might be able to avail of these cards though. Banks usually require that you have an excellent, or at least good credit score. If you do, it is likely that banks would offer you lower interest rates. Banks find it less risky to offer better deals to those who are known to be able to payoff their debts.

Those who have a great credit have good chances to obtain interest rates which are lower than a normal credit card. This could range from 9% to 15%. So if you have a good credit card, you might want to shop around some more first in looking for a better deal.

Having qualified for low interest credit cards, you will surely get better introductory offers. Usually, this could be delayed APR for up to a year. If you have this card, you'd be able to payoff credit card balances at no additional interests. This makes it highly profitable.

These offers rarely come with annual or enrollment fees. Those who have perfect credit are surely able to take advantage of all these benefits. High interest credit cards with annual fees are usually intended for high risk cardholders, specifically those with bad credit.

However, it should not be forgotten that banks are for-profit organizations. Some low interest credit cards may come with a catch. Some companies might require customers to spend a minimum amount on their credit cards or else, additional fees might be imposed. Also, the moment your low interest rate period is over, which you might not notice pass, the normal and exorbitant interest rates would apply. These are just some of the ways banks earn to compensate for their low rates.

These cards could really work for you but before committing to any card, be sure you have understood and read the fine prints. Usually, it may stipulate additional fees or conditions. It is best to be familiar with everything about the card first to be able to effectively weigh it against other low interest credit cards offered in the market.
About the Author
Aaron Ballantyne writes online about a number of topics and has a website where one can find offers for low interest credit cards.
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