Many people only consider low interest credit cards when looking to signup for a new card. One reason for this is that the credit card suppliers advertise these low interest cards more than other types of cards. However, shouldn't you consider other types of cards when looking for a new credit card? It is true that for some people, interest rate should be the most important factor in credit card selection. While low interest cards are a viable option to consider, there are also other factors to consider. First, you need to understand what an APR (annual percentage rate) is, and why it is important in selecting a card. APR is the interest rate, which is used to determine the interest on your credit card balance. If you make the full payment of your credit card bill, no interest will be charged. However, if you only make a partial payment, the balance will incur interest until it is paid off. Because of this, if you are not sure if you will be able to pay the full bill every month, you should look into low interest credit cards. The low interest rate can help reduce your total amount due by reducing the interest you will pay on your card's balance. Low interest cards will slow the rate at which your credit card debt builds up, making it easier for you to pay it off faster. As a result, low interest credit cards can be a viable choice for many people. However, there is another group of people who don't really need a low interest rate. If you are capable of paying off your credit card bill in full, and intend to do so every month, then you will not incur interest at all, so the interest rate is irrelevant. For this group of people, credit cards are mainly used for convenience and other benefits. The interest rate should not be an important factor in selecting a credit card. Thus, the need for a low interest rate or knowledge on are more felt by a particular group of people. However, even if you are searching for a low interest credit card, there are other benefits to consider. You should compare the various cards side by side to choose the one that is right for you. Nobody should choose a card based only on the interest rate. First, you need to evaluate whether you will be able to pay off the balance on your card each month. This will determine how much the interest rate should be a factor in your decision. Then, you should compare the various card options, in order to find the one which will best fulfill your needs. After all, choosing a new card is not a frequent task, so it should be done well.
In today's market low interest rate credit cards are easily found online, in the mail and at your local bank. There really isn't a difference where you decide to shop for your new credit card most places offer the same deals from the same card issuers. However, there are definitely some features you need to be aware of and avoid if possible. I have listed the most crucial points to be aware of when shopping for low interest rate credit cards, they are as follows:
Universal Default ? Universal default is a buried clause in the fine print of almost all low interest rate credit cards. It basically says that if you are late on payments they can jack up your rates at will. The scary part is that they can use your payment history from other accounts to enact the clause. Say for instance if you co-signed for a car with someone and he misses a payment you can be penalized, harshly. Interest rates can nearly triple when this clause is enacted.
Payment Grace Periods ? It used to be that consumers had a full 30 days to pay their balances before the credit card company started charging interest. This isn't true anymore. In fact the average grace period is about 22 days now. Even the low interest rate credit cards are practicing the shortened grace period. Some of your credit cards designed for bad credit do not have a grace period at all! Always find out what your grace period is.
Cash Advances ? Be careful when you pull into that ATM to get some cash for the day. Most credit card companies have higher rates for cash advances than they do for purchases. The cash advance interest rates can be almost 30% when you consider the fees added for the transaction. Also, you must pay the cash advance back over and above your regular payment to get rid of the higher interest rate. There is rarely any grace period for cash advances either. We at Credit Card Banc strongly advise against taking cash advances from any credit card.
Two-Cycle Billing ? This sneaky trick is usually buried in the fine print. Two cycle billing is when the credit card company will charge you interest based on the on the average balance carried on the card, not the actual balance. Say for instance if we charge $1000 on the card in January with the intention to the balance off completely by March in two $500 payments. Let's assume your interest rate is 10%, which makes your interest $100. Februarys you make a $500 dollar payment leaving a $500 balance. Your Interest on this balance is $50.00. Not so with two cycle billing. The card company will average the balances which is $750. Your interest due is now $75 not fifty. Look out for this trick when comparing low interest rate credit cards.
Fees, Fees and more Fees - A lot of market low interest rate credit cards will charge a hefty fee to cover their expenses. This is because most people that can qualify for a market low interest rate credit card pay their balances in full each month. If the rate on the card is low enough I really do not mind a reasonable annual fee, the call is yours. However what about the other fees? Account set up fees, monthly fees, over the limit fees, late fees, additional card fees and a host of other fees. Honestly look at your spending and payment habits and the possible fees you might incur. It could make the difference between a good deal and a bad one.
In closing, I can't stress enough that you need to read the fine print! Look at the fees, look at the billing cycles and compare all of these variables with your spending and payment habits. If you carry a balance on your card often and always pay your bills at the end of the month it may benefit to take a slightly higher interest rate in lieu of a better billing cycle and lower late fees.
Both Caden Flynn & Aubrey Clark are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Caden Flynn has sinced written about articles on various topics from Credit Cards, Check Credit Rating and Credit Loans. Knowledge is power - get more power and find out more about . Visit us at. Caden Flynn's top article generates over 135000 views. to your Favourites.
Aubrey Clark has sinced written about articles on various topics from Credit Cards, Home loans and Finances. Aubrey Clark is a syndicated writer at and writes on subjects ranging from. Aubrey Clark's top article generates over 14800 views. to your Favourites.