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To attract you into applying for their card, many offers boast of a 0% introductory APR. This 0% APR normally lasts for the first six to twelve billing cycles. After that period, the regular interest rate comes into effect. Is that regular interest rate after the introductory period expires really a low interest rate when compared to other offers?
The really low interest rate credit card offers are normally aimed towards people with higher credit scores. So when looking at the fine print of any offer, the issuer gives you an estimated rate of say between 10.99% to 17.99%. Where you would fit in depends on your credit history.
If you pay your balance in full each month, you wouldn't really be concerned with the interest rate. But many of us do carry a balance forward or we use our cards for larger purchases that we don't have the funds readily available for. For us, the lower interest rate is important.
According to the most recent studies, most consumers carry a balance of $8,000 or more on their credit card. Over a year's time, a 7% difference in interest charged on $8,000 can be a substantial amount. If you fall into this category, you really do want to look for the low interest rate credit card.
Many of the category of credit card offers have a lot of bells and whistles that are included, such as rewards that can be earned. Generally, these issues include a higher interest rate. So if you do continually carry a large balance on your account, you really shouldn't be concerned with the perks and be more in-tune to the interest rate charged.
After your search for a new credit card and you find that low interest rate credit card, be sure you abide by the terms and conditions as stated in the fine print. Just one late payment and that low interest rate is gone and you're then stuck with as high as a 30% interest rate for up to twelve months.
Your credit rating is taken into consideration in just about any part of your personal life. From buying a house to getting insurance, your credit rating is important. By maintaining good credit, you can save money by getting lower rates on your home loan to a car loan. A good credit rating can even qualify you for a low interest rate credit card.
When you look at new credit card offers today, the majority of them give you a 0% APR introductory period, which is extended from six months up to fifteen months, depending on the financial institution. If you normally carry a balance on your credit card, in the short term this 0% APR can save you money, that's true. But when the introductory period is over, did you get the lowest interest rate credit card available?
If you're looking at new credit cards, you need to look past the 0% introductory offer. There is a range of interest rates the issuer considers. If you have good credit and qualify for a low interest credit card, you really can save a lot of additional money over the years.
A low interest rate credit card is advantageous for people who normally carry a balance on their credit card account. With a new credit card that has a 0% APR introductory period, you can transfer the balance from your higher interest rate cards and pay down your debt interest free. Then when the special 0% offer expires, you will still have a low interest rate credit card.
It has probably taken you a few years to accumulate that good credit rating by budgeting and keeping within you financial means. But occasionally life throws us a curve ball and we can fall behind with our bills. If this happens, the financial institution reserves the right to raise that interest rate.
Keep in mind though, that the financial institutions are run by people just like you and me. Once things straighten out and you are again in good standing with the issuer, if you give them a call, they will often times reinstate that lower interest rate. They do value your business.