The Truth About Low Interest Credit Cards
The Truth About Low Interest Credit Cards
You want to make the switch to cashless payments. You look into the market and end up being stunned by the avalanche of options to choose from. You ask around and keep hearing about low interest credit cards. Yes, major credit card companies invest much in advertising and marketing low interest credit cards. There is a lot of hype about them in the market. However, are they the best deal available? And most importantly, are they the best option for you?
Not all low interest credit cards entail identical offers. Some credit cards offer low interest only on purchases. Any cash advance made with the cards will usually be charged at a much higher interest rate. You probably do not want that. Therefore, ensure that the low interest rate applies to both purchases as well as cash advances.
Secondly, many of these low interest offers are only introductory. This means that after the introductory period, which is usually six months, the interest rate will jump up and you’ll be stuck with having to pay off a whole lot more money just on interest. Source for a credit card offer with a fixed low interest rate.
As mentioned earlier, major companies advertise heavily on low interest credit cards. You would have probably seen them on television, heard about them on radio, caught them on billboards or even received mails on them. Be aware that they are not your only options. Do an extensive research. There are other companies, unions or associations that might provide you with much better deals. Just be sure to check on the legitimacy and reliability of these organizations.
Of course, let us not forget the most important factor – YOU. Although credit cards allow us to spend money that we actually may not possess at the point of purchase, please do not get carried away with it. To guarantee that our credit cards remain our assets and not our liabilities, we should always pay off the balances in our credit cards within the no-interest period every month. That way, we have the luxury of borrowing money for a short period monthly without suffering any interest charge. However, there are many of us who may have a tendency to overspend every month and keep balances on the credit cards to be slowly repaid over time. Ask yourself what is your unique expenditure patterns and preferences.
If you are the type to conscientiously pay off your balances every month within the no-interest time frame, you probably have no need for a low interest credit card. It is more suited for those who keep the balances. In order to help you make a more informed decision, let us look into the pitfalls of low interest credit cards.
First of all, what most people don’t tell you is that companies are actually more stringent on issuing low interest credit cards. They prefer low-risk customers and therefore, they will approve your credit card application only if you have very good credit rating.
Secondly, the annual fees charged on low interest credit cards are usually higher. If you factor those fees in, the savings made on the interest may eventually be offset. Once again, your spending patterns become an issue here. If you have a substantial balance on your credit card, you would still make savings with the low interest credit card despite the high annual fees. On the other hand, if you maintain a zero balance on your credit card, you’ll lose more on the annual fees.
Lastly, low interest credit cards also do not come with much perks or good reward schemes. If you are the type to keep no outstanding payments on your credit cards, you may end up being disadvantaged by low interest credit cards. You’ll neither benefit from the low interest rate nor the reward schemes.
As mentioned earlier, study your own spending tendencies and your individual needs. Evaluate the pros and cons of low interest credit cards for you. Do your research and compare everything that each credit card offers. Finally, check on the customer service, legitimacy and reliability of the company you wish to get your credit card from.
Uma Ilango is a programmer from profession. She writes regulary at Bigarticlepool.com. Thousands of new articles are added every month.
Article Source:http://www.articlesbase.com/credit-articles/the-truth-about-low-interest-credit-cards-976724.html
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